.. 12.25 Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000-tires are ordered, and $17 per tire if 1,000 or more tires are ordered. a) How many tires should Rocky Mountain order each time it places an order? b) What is the total cost of this policy? PXn

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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.. 12.25 Rocky Mountain Tire Center sells 20,000 go-cart
tires per year. The ordering cost for each order is $40, and the
holding cost is 20% of the purchase price of the tires per year.
The purchase price is $20 per tire if fewer than 500 tires are
ordered, $18 per tire if 500 or more-but fewer than 1,000-tires
are ordered, and $17 per tire if 1,000 or more tires are ordered.
a) How many tires should Rocky Mountain order each time it
places an order?
b) What is the total cost of this policy? PXn
Transcribed Image Text:.. 12.25 Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000-tires are ordered, and $17 per tire if 1,000 or more tires are ordered. a) How many tires should Rocky Mountain order each time it places an order? b) What is the total cost of this policy? PXn
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