The Metropolitan Bus Company (MBC) purchases diesel fuel from American PetroleumSupply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 perorder 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 annualfuel usage is 150,000 gallons. MBC buses operate 300 days a year.a. What is the optimal order quantity for MBC?b. How frequently should MBC order to replenish the gasoline supply?c. The MBC storage tanks have a capacity of 15,000 gallons. Should MBC considerexpanding the capacity of its storage tanks?d. What is the reorder point? The Metropolitan Bus Company (MBC) purchases diesel fuel from American PetroleumSupply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 perorder to cover the expenses of delivering and transferring the fuel to MBC's storage tanks.ems661The lead time for a new shipment from American Petroleum is 10 days; the cost of hold-ing a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year; and annualfuel usage is 150,000 gallons. MBC buses operate 300 days a year.a. What is the optimal order quantity for MBC?How frequently should MBC order to replenish the gasoline supply?The MBC storage tanks have a capacity of 15,000 gallons. Should MBC considerexpanding the capacity of its storage tanks?d. What is the reorder point?c.

Given that: Ordering Cost, S = $250 / order Holding Cost, H = $0.48 /year Annual demand, D = 150000…

Answered: The Metropolitan Bus Company (MBC)…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum
Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 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 150,000 gallons. MBC buses operate 300 days a year.
a. What is the optimal order quantity for MBC?
b. How frequently should MBC order to replenish the gasoline supply?
c. The MBC storage tanks have a capacity of 15,000 gallons. Should MBC consider
expanding the capacity of its storage tanks?
d. What is the reorder point?