A service station uses 1,200 cases of oil a year. Ordering cost is $ 40, and annual

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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?

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Operations Management

ISBN: 978-0078024108

12th edition

Authors: William J Stevenson

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Question Posted: Dec 30, 2014 07:02 AM

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A service station uses 1,200 cases of oil a year. Ordering cost is $ 40, and annual

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Given D 1200 cases S 40 per order H 3 per case per year Service level 99 a Determine the optimal ...View the full answer

Operations Management

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