Compute number of models of each truck must be bought

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Reference no: EM13111087

The Two-Rivers Oil Company near Pittsburgh transports gasoline to its distributors by truck. Company currently contracted to supply gasoline distributors in souther Ohio, and it has 600,000 available to spend on essential expansion of its fleet of gasoline tank trucks. Three models of gasoline tank trucks are available. Super Tank, Regular Line, Econo-Tanker. Super Tank capacity gallons are 5,000 buying cost is 67,000 and Monthly operating cost are 550. Regulare capacity gallons are 2,500 buying caost is 55,000 and monthly operating cost is 425. Econo-Tanker capacity gallons are 1000 buying cost is 46,000 and monthly operating cost is 350. Company evaluates that monthly demand for region will be 550,000 gallons of gasoline. As size and speed differences of trucks the number of delieveries or round trips possible per month for each truck model will differ. Trip capacities are evaluated at 15 trips per month for super tanker, 20 trips per month for regular line, and 25 trips for Econo Tanker. Based on maintenance and driver availability firm doesn't want to add more than 15 new vehicles to its flee. In addition, company has made decision to buy at least three of new Econo-Tankers for use on short-run, low-demand routes. As the final constraint, conpany deosn't want more than half new models to be Super Tankers.

A) if company wants to satisfy gasoline demand with minimum monthly operating expense, how many many models of each truck must be bought?

B) if company didn't need at least three Econo-Tankers and did not limit number of Super Tankers to at most half new models, how many models of each truck must be bought?

Reference no: EM13111087

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