Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

52. Schaan Healthcare Products is a distributor of medical/surgical products in Saskatchewan. Schaan has a warehouse in Saskatoon that carries thousands of items, one of

image text in transcribed
52. Schaan Healthcare Products is a distributor of medical/surgical products in 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. Schaan's inventory manager uses a three-month moving average to forecast next month's demand for the items. The three-month moving average forecast for December's 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. @ -@ 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. . 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A First Course in General Relativity

Authors: Bernard Schutz

2nd edition

521887054, 978-0521887052

More Books

Students also viewed these Mathematics questions