Dulles Electric Company buys 1 million tons of coal annually to burn at its power plant. The company wants to invest in a unit train that will haul coal from the mine to the power house, where it is dumped in a large field. The shipping cost is expected to be $40 a ton. The cost of capital to Dulles is 10% per annum. The price of coal is $180 a ton. The cost of processing an order is $12,500. Find the optimal capacity of the unit train. How often does it make the trip to the mine?

 

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1 Annual Demand for Coal The Dulles Electric Company buys 1 million tons of coal annually 2 Orderin... View the full answer