Lead time demand is normally distributed

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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 an annual service level of 99 percent.

Use Table.

a. What is the optimal order quantity? (Round your answer to nearest whole number.)

Optimal order quantity             cases

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? (Round up your answer to nearest whole number.)

Safety stock             cases

Reference no: EM132247213

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