A car dealership uses 1,200 cases of oil a year. Ordering cost is $40, and annual carrying
Question:
A car dealership uses 1,200 cases of oil a year. Ordering cost is $40, and annual carrying cost is
$3 per case. The manager wants 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?
LO.1
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Saud Ur Rehman
Evaluating manufacturing processes by designing and conducting research programs; applying knowledge of product design, fabrication, assembly, tooling, and materials; conferring with equipment vendors; soliciting observations from operators. Developing manufacturing processes by studying product requirements; researching, designing, modifying, and testing manufacturing methods and equipment; conferring with equipment vendors. Keeping equipment operational by coordinating maintenance and repair services; following manufacturer's instructions and established procedures; requesting special service.
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