United airlines has an agreement to buy jet fuel from exxon, Ask an Expert

Management Studies

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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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92296012

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