[solved]-A Service Station Uses 1200 Cases Of Oil A Year

A service station uses 1,200 cases of oil a year. Ordering cost is $ 40, and annual carrying cost is $ 3 per case. The station owner has specified a service level of 99 percent.

a. What is the optimal order quantity?

b. What level of safety stock is appropriate if lead time demand is normally distributed with a mean of 80 cases and a standard deviation of 6 cases?

Expert Answer

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