What will be the average inventory of fuel

Assignment Help Operation Management

Reference no: EM13904382

Steve owns a local trucking company. With fuel costs being expensive, Steve wants to evaluate how much fuel, on average, he should store in his 8,000 gallon fuel tank. Each year Steve uses 80,000 gallons of diesel (usage is spread evenly throughout the year). Steve knows with certainly that he can have a load of fuel delivered in 5 days. The price of fuel is $3.25 per gallon and there is a separate $100 ordering fee per order. Steve thinks his holding cost per unit is 20%. If Steve orders at EOQ, what will be the average inventory of fuel in his 8,000 gallon tank?

Reference no: EM13904382

Questions Cloud

Jumbled list of persons and job activities into logical flow : Recognize the following jumbled list of events, persons, and job activities into a logical flow, from start to finish, of the guest arrival process

One air traffic controller to land planes : The Peachtree Airport in Atlanta serves light aircraft. It has a single runway and one air traffic controller to land planes. It takes an airplane 12 minutes to land and clear the runway. Planes arrive at the airport at the rate of four per hour. Det..

Consider the social factors that influence consumer decision : Consider the social factors that influence consumer decisions. Select two demographic or psychographic factors that would be most important to these product-marketing situations:

Interval approach to managing his inventory of corn chip bag : John uses a fixed order interval approach to managing his inventory of corn chip bags (i.e., John orders more bags on the 1st of each month). John doesn't know demand with certainty, but he usually ranges from 2000 to 4000 bags, so he keeps 4500 bags..

What will be the average inventory of fuel : Steve owns a local trucking company. With fuel costs being expensive, Steve wants to evaluate how much fuel, on average, he should store in his 8,000 gallon fuel tank. Each year Steve uses 80,000 gallons of diesel (usage is spread evenly throughout t..

Quantity discounts are available according to the schedule : Annual demand for an item is 35,000 units. The holding cost rate is 15% of the item cost. Ordering costs are $25 per order. Assume 52 5-day weeks per year. If the lead-time is 1 week, what should the reorder point be?

Desired during the reorder interval-what is reorder point : Annual demand for an item is 11,000 units with the cost per unit at $250. The holding rate is 10% and the order cost is $14.00 per order. The standard deviation of daily demand is 3 units. Assume 260 days in the year and a lead-time of 2 days. If a s..

Example of an experiential training method : Which of the following is an example of an experiential training method?

Initiated system where high-potential employees : A pharmaceutical company, TechnoGene, has initiated a system where high-potential employees are identified and trained for senior positions in the company. Which of the following processes is exemplified in this scenario?

User Account

All Pages