# Rocky Mountain Tire Center sells 6,000 go-cart tires per year. The ordering cost for

Question: Rocky Mountain Tire Center sells 6,000 go-cart tires per year. The ordering cost for each order is \$40, and the holding cost is 30% of the purchase price of the tires per year. The purchase price is \$22 per tire if fewer than 200 tires are ordered, \$16 per tire if 200 or more, but fewer than 5,000, tires are ordered, and \$13 per tire if 5,000 or more tires
Show transcribed image text 100% (1 rating)a ) 5000 units b ) 87798 ———————- STEPS: Given: Holding cost(H) = 30% of purchase price Ordering cost (S) =\$40 Annual demand(D) = 6000 tires Quantity price Holding cost (H) at 30% 0-200 22 30%*22 = 6.6 200-5000 16 30%*16 = 4.8 5000 or m…View the full answerTranscribed image text: Rocky Mountain Tire Center sells 6,000 go-cart tires per year. The ordering cost for each order is \$40, and the holding cost is 30% of the purchase price of the tires per year. The purchase price is \$22 per tire if fewer than 200 tires are ordered, \$16 per tire if 200 or more, but fewer than 5,000, tires are ordered, and \$13 per tire if 5,000 or more tires are ordered. a) How many tires should Rocky Mountain order each time it places an order? Rocky Mountain’s optimal order quantity is 5000 units (enter your response as a whole number). b) What is the total cost of this policy? Total annual cost of ordering optimal order size = \$ (round your response to the nearest whole number).