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Jack owns a local trucking company. With the high fuel costs, Jack wants to evaluate how much fuel, on average, he should store in his 30,000 fuel tank. Each year Jack uses 70,000 gallons of diesel (usage is spread evenly throughout the year). Jack knows with certainly that he can have a load of fuel delivered in 12 days. Jack says, "The darn delivery service charges a $250 fee for each delivery, no matter how much I purchase." Earlier this year, Jack hedged his fuel at $4.80 per gallon. Jack thinks his holding cost per unit is 10%. If Jack orders at EOQ, what will be the average inventory of fuel in his 30,000 gallon tank?
A. 1,651 gallons
B. 3,974 gallons
C. 4,270 gallons
D. 12,649 gallons
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