Would the eoq assumptions be satisfied in the situation

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Reference no: EM13236866

Each month, a gas station sells 4,000 gallons of gasoline.

Each time the parent company refills the station's tanks, it charges the station $50 plus 70¢, per gallon. The annual cost of holding a gallon of gasoline is 30¢.

a)How large should the station's orders be?
b)How many orders per year will be placed?
c)How long will it be between orders?
d)Would the EOQ assumptions be satisfied in this situation? Why or why not?
e) If the lead time is two weeks, what is the reorder point? If the lead time is ten weeks, what is the reorder point? Assume 1 week=1/52 year

Reference no: EM13236866

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