A tire dealer buys 4000 tires a year from a local distributor. Each tire costs $75, the ordering fee is $30 per shipment and the storage cost is $24 per tire per year. How many tires should be ordered in each shipment in order to minimize the total cost?
A tire dealer buys 4000 tires a year from a local distributor. Each tire costs $75, the ordering fee is $30 per shipment and the storage cost is $24 per tire per year. How many tires should be ordered in each shipment in order to minimize the total cost?
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 20AA
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