The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $250 per order to cover the expenses of delivering and transferring the fuel to MBC's storage tanks. The replenishment lead time for a new shipment from American Petroleum is assumed to be 0; the cost of holding a gallon of fuel in the storage tanks is $0.04 per month; and monthly fuel usage is 15,000 gallons. MBC buses operate 300 days a year. What is the optimal order quantity for MBC? How much is the cycle inventory? How much is the number of orders per year? How much is the total annual ordering and holding cost? How many days are the average flow time? If the order quantity is changed to 10,000, please explain the total annual ordering and holding cost will increase or decrease. An explanation of formulas would be helpful.

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