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

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A car service shop uses 1,200 cases of oil a year. Ordering cost is $20 per order, and annual holding cost is $3 per case. The shop 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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Operations Management

ISBN: 9781259270154

6th Canadian Edition

Authors: William J Stevenson, Mehran Hojati, James Cao

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Question Posted: Aug 10, 2020 04:49 AM

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

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D 1200 casesyear S 20 H 3 p...View the full answer

Operations Management

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