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where d is the average lead time demand; . L is the lead time; z is the standardized normal variate (or the number of standard deviations for a specified service level; . o, is standard deviation of the lead time demand. It is important to ensure that the units for mean, standard deviation, and lead time are the same. For example, the mean, standard deviation, and lead times must all be in days (or months, or years). h64 Sam Motors 41 lthorized service station for passenger cars. The demand for engine oil seals at Sam Motors is 100 per month with a standard deviation of 5 per month. The lead time for procuring these seals from the market is 1 month. Each seal costs $1 and the ordering cost is $5 per order. If the inventory carrying rate used is 10% per annum, compute the economic order quantity and the reorder point if a cycle service level of 85% is desired. Assume demand during lead time to be normally distributed