BestOil serves three customers near Spencer and maintains consignment inventory at each facility. Currently, BestOil uses full truckload (TL) deliveries to each customer at a cost of $1050 per truck, and each truck has a capacity of 12 tons. BestOil is considering whether to aggregate deliveries to the three facilities on a single truck. Doing so would cost $800 per trip, plus $250 per stop (thus, if they made 1 stop it would be equal to the $1050 quoted earlier). The demand at customer 1 is 20 tons per year, customer 2 is 60 tons per year, and customer 3 is 8 tons per year. Each ton of oil costs $10,000 to produce, and BestOil annual holding cost percentage is 25%. For each of the following scenarios, determine the total annual cost to BestOil, and the flow time at each customer. Flag question: Spacer 1. BestOil continues the policy of delivering a full truckload (12 tons) to each customer on each order. What is the total annual cost to BestOil and the flow time at each customer?
