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4) 116 pts.] A hospital must order the drug Porapill from Daisy Drug Company. It costs S500 to place an order and $30 to review

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4) 116 pts.] A hospital must order the drug Porapill from Daisy Drug Company. It costs S500 to place an order and $30 to review the hospital's inventory of the drug. Annual demand for the drug is normally distributed with mean 10,000 units and variance 640,000. It costs $5 to hold one unit in inventory for one year. Orders arrive one month after being placed. Assume that all shortages are backordered. a. Based on the EOQ, estimate review period R and the number of orders per year that should be placed b. Using the answer in part (a), determine the optimal (R, S) inventory policy. Assume that the backordcring cost pcr unit of the drug is S100. Note: For an (R, S) system, if no service level is given, and if all shortages are backordered; Pr (Demand during R+I)2 S-Rhiy (where h: holding cost,backordering cost, R: rview period, 1.: lead time)

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