Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jones Surgicenter uses 90,000 bags of IV solution annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the

Jones Surgicenter uses 90,000 bags of IV solution annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the center $1.50, inventory carrying costs are 20 percent, and the cost of placing an order with its supplier is $15. Assume 365 operational days per year.

a. What is the economic order quantity? Note: Format is x,xxx

b. What is the maximum inventory of IV solution bags? Note: Format is x,xxx

c. What is the center's average inventory of IV solution bags? Note: Format is x,xxx

d. How often must the center order (in days)? Note: Round DOWN to the nearest day for this problem. Format is: xx days

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Financial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

9th Edition

1118334329, 978-1118334324

Students also viewed these Accounting questions