Question: Raw materials inventory for an oil processing plant located in Arnold, MO , is procured from a large supplier via rail. Each shipment costs $

Raw materials inventory for an oil processing plant located in Arnold, MO, is procured from a large supplier via rail. Each shipment costs $2500. The Arnold, MO facility produces 2,000 gallons of oil per hour, operates 14 hours per day in two shifts, and is open 7 days a week for 52 weeks a year. Raw materials cost $0.2 per gallon and incur a holding cost of 20 percent per year. How many gallons of raw materials should be ordered per shipment? How often will this order be placed? What is the cycle inventory for the raw materials?

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