Regional Supermarket is open 360 days per year. Daily use of cash register tape averages 10 rolls. Usage appears normally distributed with a standard deviation of 2

Description

QUESTION:

Regional Supermarket is open 360 days per year. Daily use of cash register tape averages 10 rolls. Usage appears normally distributed with a standard deviation of 2 rolls per day. The cost of ordering tape is $1, ordering tape is $1, and carrying costs are 40 cents per roll a year. The lead time is three days.

a. What is the EOQ?

b. What ROP will provide a lead time service level of 96 percent?