The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $400 per order to cover the expenses of delivering and transferring the fuel to MBC's storage tanks. The lead time for a new shipment from American Petroleum is 9 days; the cost of holding a gallon of fuel in the storage tanks is $0.03 per month, or $0.36 per year; and annual fuel usage is 180,000 gallons. MBC buses operate 270 days a year.

What is the optimal order quantity for MBC?

How frequently should MBC order to replenish the gasoline supply?

The MBC storage tanks have a capacity of 15,000 gallons. Should MBC consider expending the capacity of its storage tanks?

What is the reorder point?