Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply
The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $200 per order to cover the expenses of delivering and transferring the fuel to MBC's storage tanks. The lead time for a new shipment from American Petroleum is 10 days; the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year; and annual fuel usage is 120,000 gallons. MBC buses operate 300 days a year.
-What is the optimal order quantity for MBC? Q* =
2.How frequently should MBC order to replenish the gasoline supply?
____ orders per year
3.The MBC storage tanks have a capacity of 15,000 gallons. Should MBC consider expending the capacity of its storage tanks?
Metropolitan Bus Company ___need or does not need to expand_____________________the capacity of its storage tanks.
4.What is the reorder point?
r = ______gallons
