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SunValley 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, and carrying costs are 40 cents per roll a year. Lead time is three days.
1. What is the EOQ?
2. What ROP will provide a service level of 95 percent?
3. What would be the ROP for the tape if the lead time has a standard deviation of 1 days?
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