Steve owns a local trucking company with fuel costs being


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?

Request for Solution File

Ask an Expert for Answer!!
Operation Management: Steve owns a local trucking company with fuel costs being
Reference No:- TGS01199748

Expected delivery within 24 Hours