Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Athens Gas Station has figured out the weekly demand distribution for their gas sales. Each gallon of gas sold at the pump results in a

Athens Gas Station has figured out the weekly demand distribution for their gas sales. Each gallon of gas sold at the pump results in a profit of 10 cents/gallon and any lost sales results in a cost of 15 cents/gallon. The gas station at present has 2000 gallons in storage. The storage capacity is 5500 gallons. Any excess gas above the storage capacity is shipped back to the distributor at a cost of $2 cents/gallon. Simulate the demand for 40 weeks.

Demand Probability
2000 0.12
3000 0.23
4000 0.48
5000 0.17

a) What is the average weekly demand, sales, shortage and ship back quantities? What are the corresponding average weekly costs and profits?

b) Vary the order quantity to figure out the one that results in highest average weekly profit. Plot a chart of order quantity and profit to make your point.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Linear Algebra With Applications

Authors: W. Keith Nicholson

7th Edition

978-0070985100, 70985103

More Books

Students also viewed these Mathematics questions

Question

What are some of the features of the Unified Process (UP)?

Answered: 1 week ago