Illustrate what level of safety stock is appropriate if lead

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Reference no: EM1373877

Q. A service station uses 1,200 cases of oil a year. Ordering cost is $40 and Yearly carrying cost is $3 per case. The station owner has specified a Yearly service level of 99%. ROP = 77 cases

a. Illustrate 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 5 cases?

b. Illustrate what is the risk of a stock out during lead time?

Reference no: EM1373877

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