An economic price adjustment clause was included in a, Operation Management

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An economic price adjustment clause was included in a

An economic price adjustment clause was included in a two-year contract for 500,000 gallons of fuel at $3.50 per gallon. The Producer Price Index (PPI) for January 2015, the month of the award, is 175. If the PPI for January 2016 is 188, what will the contract price per gallon adjust to for the second year?

a. $3.59 b. $3.76 c. $3.79 d. $3.90

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