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Management Studies

Reef's Petroleum Company sells two types of gasoline: Regular and Premium. RPC pays $2.00 for each gallon of regular gasoline and $2.20 for each gallon of Premium gasoline that it sells. The owner's son, Luke Reef, and MBA student at the University of Alabama, has already analyzed the company's sales and price data. He discovered that the demand for each type of gasoline is influenced by its own price as well as by the price of the other type of gasoline. Luke has estimated that the weekly demand for each type of gasoline can be approximated by the following formulas: Regular Demand=10,000-3,000xregularprice+150 x Premium price, Premium Demand=8,000+50xregularprice-2,200x premium price. Draw an influence chart for this problem and construct a spreadsheet model to analyze this problem. Use $2.50 and $2.70 as the base case selling prices for the Regular and Premium gasoline, respectively

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91700082

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