A school bus depot operates 250 days a year. Daily demand for diesel fuel at the depot is Normal with an average of 250 litres and a standard deviation of 14 litres. Holding cost for the fuel is $.30 per litre per year, and it costs $10 in administrative time to submit an order for more fuel, [t takes one day to receive a delivery of diesel fuel. (L03 & 4)
a. Calculate the EOQ.
b. Determine the amount of ROP that would be needed if tire manager wants an annual service level of 99.5 percent.