A small oil change shop uses an average of 80 litres of 5W40 synthetic oil per day.
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Question:
A small oil change shop uses an average of 80 litres of 5W40 synthetic oil per day. Usage tends to be normally distributed with a standard deviation of 8 litres per day. Lead time is four days, and the desired service level is 92 percent. What amount of safety stock is appropriate under each of these conditions:
(i) Oil is reordered every 45 days.
(ii) A fixed order size of 2400 litres is used.
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