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The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply

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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

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