Question: Need help solving these questions correctly thanks! Problem 10-05 (Algorithmic) The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to

Need help solving these questions correctly thanks!

Need help solving these questions correctlyNeed help solving these questions correctly

Problem 10-05 (Algorithmic) The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $300 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 $0.06 per month, or $0.72 per year; and annual fuel usage is 120,000 gallons. MBC buses operate 300 days a year a. What is the optimal order quantity for MBC? Q* = 125 X b. How frequently should MBC order to replenish the gasoline supply? 12 orders per year c. The MBC storage tanks have a capacity of 15,000 gallons. Should MBC consider expending the capacity of its storage tanks? Metropolitan Bus Company does not need to expand the capacity of its storage tanks. d. What is the reorder point? 6,250 X gallons The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%. a. Determine the economic order quantity and total annual cost under the assumption that no backorders are permitted. If required, round your answers to two decimal places. Q* = 34.64 Total Cost = $ 415.69 b. Using a $45 per-unit per-year backorder cost, determine the minimum cost inventory policy and total annual cost for the model racing cars. If required, round your answers to two decimal places. S* 207.91 Total Cost = $ 369.35

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!