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5 * 2 . Schaan Healthcare Products is a distributor of medical / surgical productsin Saskatchewan. Schaan has a warehouse in Saskatoon that carries thousands

5*2. Schaan Healthcare Products is a distributor of medical/surgical productsin Saskatchewan. Schaan has a warehouse in Saskatoon that carries thousands of items, one of which is item #345-5870, Micro-Touch Surgical Glove, size 7. The demand for this item (in cases) during a September to November period was 25,57, and 50, respectively. Schaans inventory manager uses a three-month moving average to forecast next months demand for the items. The three-month moving average forecast for Decembers demand for size 7 gloves is 44 cases. Suppose that he uses the EOQ model to replenish this item. The surgical gloves are purchased from Ansell Limited in cases of 200 units at a cost of $120 per case. Use the three-month moving average forecast for December, ordering cost of $15 per order, inventory holding cost rate of 15 percent per year, and purchase lead time of two days. LO3 LO5
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a. Calculate the EOQ for this item (rounded to a whole number).
b. Calculate the total annual holding and ordering cost if order quantity
is 30 cases.
c. Using lead time service level of 96 percent and standard deviation of
monthly demand of 16.82 cases, calculate the ROP (rounded to a
whole number).
d. Suppose Schaan uses the fixed-interval model for replenishing this
item. Calculate the order quantity for this item (rounded to a whole
number) if it is ordered every two weeks, there is no on hand
inventory at reorder time, and the desired service level is 94 percent

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