A service station uses 1,200 cases of oil a year. Ordering cost is $20 per order, and

Question:

A service station uses 1,200 cases of oil a year. Ordering cost is $20 per order, and annual holding cost is $3 per case. The station owner has specified an annual service level of 99 percent.
a. What is the EOQ?
b. What level of ROP is appropriate if demand during a lead time is normally distributed with a mean of 80 cases and a standard deviation of 5 cases?

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