A company that supplies gasoline to a city has recorded the weekly usage (tons/week) for the past…
A company that supplies gasoline to a city has recorded the weekly
usage (tons/week) for the past 10 weeks. Use the provided data.
(a) Propose a method for predicting the demand for gasoline. Use that
method to forecast demand for next 10 weeks (weeks 11 to 20).
(b) Improve your prediction in part (a) by including a statement about demand
variability. (Hint: Look at or the range of the data.)
(c) In general, the company delivers the demanded gasoline to customers
that store it in their own facilities. However, the company would like to
obtain its own storage tanks to better handle variability. The company
has identified several solutions: a 500 ton, a 1000 ton, a 2000 ton and a
3000 ton system, with each tank being proportionately more expensive
as its size grows. Given your predictions and the expected variability,
what size of tank would you choose?
(d) Reaching the city is sometimes hazardous due to weather conditions.
Even with these challenges, the company estimates that the most that
shipments to the city may be delayed is 1 week. Given this information,
which tank choice (of those in part c) do you think would be appropriate?