Question: A local service station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 20 cans per day.

A local service station is open 7 days per week, 365

A local service station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 20 cans per day. Inventory holding costs are $0.50 per can per year. Ordering costs are $10 per order. Lead time is two weeks. Backorders are not practical-the motorist drives away. a. Based on these data, calculate the economic order quantity and reorder point. Hint. Assume demand is deterministic. Note: Round your answers to the nearest whole number. b. The boss is concerned about this model because demand really varies. The standard deviation of demand was determined from a data sample to be 6.15 cans per day. The manager wants a 99.5 percent service probability. Determine a new inventory plan based on this information and the data in a. Use Qopt from a. Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number

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