United airlines has an agreement to buy jet fuel from exxon, Marketing Management

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United airlines has an agreement to buy jet fuel from exxon

Question: United Airlines has an agreement to buy jet fuel from Exxon. The goal is to minimize total cost (i.e., ordering cost + holding cost). The annual demand for fuel is 58,000 barrels. Exxon charges United $2300 to process each order. United incurs a holding cost of $24 per barrel.

At what order quantity will the total cost of procurement be the lowest?

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Marketing Management: United airlines has an agreement to buy jet fuel from exxon

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