Rocky Mountain Tire Center sells 9,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 50% of the purchase price of the tires per year. The purchase price is $18 per tire if fewer than 200 tires are ordered, $16 per tire is 200 or more - but fewer than 5000 - tires are ordered and $13 per tire if 5,000 or more tires are ordered.
Rocky Mountain's optimal order quantity is 5000 units
1. What is the total cost of this policy?