Running head: Prdctn & Oprtns Mgt
Production and Operations Management
Dr. John Theodore
November 14, 2010
Building more ports and pipelines to transport and distribute crude oil could reduce the time involve in the production process. Gasoline is refined from crude oil. . In general OPEC sets most of the price of crude oil and therefore the price of gas. The Organization of the Petroleum Exporting Countries (OPEC) makes the decisions concerning crude oil, therefore, if crude oil prices increase there is a possibility that gas prices will increase. Unless the oil companies can find another way to extract the oil without drilling there is no ...view middle of the document...
A robot is reprogrammable and capable of performing a variety of jobs that require manipulation of materials and tools (Boone, L., Kurtz, D., p.361, 2011).
Discuss the relationship between the retail price of gasoline and the price of crude oil.
One of the main products refined from crude oil is gasoline. About 17% of the energy consumed in the United States is gasoline. The cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station cost and taxes is included in the cost to produce and deliver gasoline to consumers. The prices paid by consumers at the pump reflect these costs as well as the profits of refiners, marketers, distributors, and retail station owners (eia).
Gas is cultivated from crude oil, and people link the price of gasoline with that of crude oil. How much more a gallon of gas cost than a gallon of crude oil varies quite a bit. From 2000 to 2008, the price of crude oil made up 51 percent of the price of gasoline, however, shortages in 2008 shot up to 69 percent (ehow, 2009).
Federal and local taxes, profit margins, refining, transportation and marketing of gasoline make up the rest of the price of gas. Other than the price of crude oil, taxes factor in the most to the cost of gas, according to the U. S. Energy administration. The price of crude oil tends to have a direct relationship, especially during periods of relative scarcity of crude oil. Several wars in the Middle East caused crude oil prices to triple, which coincided with gas prices nearly doubling (ehow, 2009).
The highest average gas price in the U.S. occurred on July 7, 2008, when gas cost an average $4.04 per gallon. At the same time crude oil also hit an all-time high of about $95 per barrel. In general OPEC sets most of the price of crude oil and therefore the price of gas. In addition they are the only countries that can increase...