Problem $10-05($Algorithmic$)$

days a year.

a$.$ What is the optimal order quantity for MBC$?$

$Q^{**}=$

b$.$ How frequently should MBC order to replenish the gasoline supply?

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

the capacity of its storage tanks.

d$.$ What is the reorder point?

$r=$

$x$ gallons The Metropolitan Bus Company $($MBC$)$ purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $$150$ per order to cover the expenses of delivering and transferring the fuel to MBC$\text{'}$s storage tanks. The lead time for a new shipment from American Petroleum is $10$ days; the cost of holding a gallon of fuel in the storage tanks is $$0\mathrm{.}05$ per month, or $$0\mathrm{.}6$ per year; and annual fuel usage is $50,000$ gallons. MBC buses operate $250$ days a year.

What is the optimal order quantity for MBC$?$

Q$*=$ fill in the blank $1$

How frequently should MBC order to replenish the gasoline supply?

fill in the blank $2$

orders per year

The MBC storage tanks have a capacity of $15,000$ gallons. Should MBC consider expending the capacity of its storage tanks?

Metropolitan Bus Company

the capacity of its storage tanks.

What is the reorder point?

r $=$ fill in the blank $4$

gallons