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QUESTION 2. Quick Repair Garages are a specialist tyre replacement garage. They replace car tyres on an "as required" basis and offer a 15 minute service to customers. Because of this they need to hold an inventory of tyres at the garage. One particular tyre has an annual demand of 800 units and it costs Quick Repair Garages 35 to place the order for tyres and have them delivered by the supplier, regardless of the number of tyres ordered. Quick Repair Garages fund their business with a commercial loan with an interest of 20% per year. The supplier, in order to increase sales, offers a price discount depending on the quantity of tyres in each order. The percentage price discount from the nominal tyre price of 10 is given in Table 2. Quantity ordered Discount I to 99 0% 100 to 199 2.5% 200 to 299 5% 300+ 6% Table 2. Quantity discounts offered by Tyre Supplier 2a) How many tyres should Quick Repair Garages order in each delivery to minimise total annual costs? (40%) 2b) What is the minimised total annual cost with this order quantity? (10%) 2c) How many orders are placed per year? (10%) 2d) Describe some of the managerial implications of the Economic Order Quantity model. (40%)