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1. Suppose we use the EOQ model to compute an order quantity Q and a reorder point ROP corresponding to a 94% service level. Assume
1. Suppose we use the EOQ model to compute an order quantity Q and a reorder point ROP corresponding to a 94% service level. Assume daily demand is normally distributed. Suppose that we make the following changes: We double the lead time while the distribution of daily demand does not change and the service level does not change. After the changes, the new reorder point will be twice as large as the reorder point ROP. (2 marks)
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