K A C D E 1 labo need your assistance in claulating the following economic order quantity (Qe)glven new data for 2017, 2 Our inventory generally follows Pareto's Law, therefore, I have emphasized controlling those Items representing the majority of our inventory activity. 3 One of those items in IV (intravenous) setups 4 Our current situation is as follows: 2016 Price $50 for each IV setup 2017 Demand 50,000 2017 Operating cost $25 B 2017 Interest 6.25% 9 2017 Holding Cost $0.50 The IV distributor would like to distribute a new model setup in 2017 at the same price, but he tells us that he is willing to reduce our carrying costs by making monthly deliveries. 1 After discussing this proposal with Ms. Care, I discovered that training will be required for the new setup, Ms. Care believes, and the distributor agrees, that each registered nurse (RN) will be required to attend a 2 hour seminar, 3 I'm not sure where we put this training cost in the total cost formula. Ms. Care tells me there are significant quality advantages with the new setup and she would prefer the new setup s What do you think? 6 lt we lose money on the new model, what price can wr negotiate with the IV disributor to cover our loss? 7 Reference Pares 395-40% Economk Order Quantity Practice Problem 0 2 K A C D E 1 labo need your assistance in claulating the following economic order quantity (Qe)glven new data for 2017, 2 Our inventory generally follows Pareto's Law, therefore, I have emphasized controlling those Items representing the majority of our inventory activity. 3 One of those items in IV (intravenous) setups 4 Our current situation is as follows: 2016 Price $50 for each IV setup 2017 Demand 50,000 2017 Operating cost $25 B 2017 Interest 6.25% 9 2017 Holding Cost $0.50 The IV distributor would like to distribute a new model setup in 2017 at the same price, but he tells us that he is willing to reduce our carrying costs by making monthly deliveries. 1 After discussing this proposal with Ms. Care, I discovered that training will be required for the new setup, Ms. Care believes, and the distributor agrees, that each registered nurse (RN) will be required to attend a 2 hour seminar, 3 I'm not sure where we put this training cost in the total cost formula. Ms. Care tells me there are significant quality advantages with the new setup and she would prefer the new setup s What do you think? 6 lt we lose money on the new model, what price can wr negotiate with the IV disributor to cover our loss? 7 Reference Pares 395-40% Economk Order Quantity Practice Problem 0 2
