Please answer below questions, after reading following text 1. What are the factors which constitute inventory holding costs, order costs and stock-out costs in a National Blood Service? 2. What makes this particular inventory planning and control example so complex? The Blood Bank's Perfect Storm Inventory depends on both supply and demand, so when both are uncertain, inventory management poses particular challenges. And when, in addition, the consequences of running out of stock can affect people's health, then inventory management becomes a particularly vital task. Welcome to the world of the Blood Stocks Management Scheme of the National Health Service Blood and Transplant (NHSBT) that manages blood stocks across the blood supply chain in the UK. NHSBT is responsible for the collection, processing, testing and issuing of blood across England and North Wales. Each year approximately 2 million blood donations are collected from 1.4 million donors to supply hospitals with all the blood needed for accident and emergency situations and regular medical treatment. Many people owe their lives to transfusions that were made possible by the efficient management of blood, stocked in a supply network that stretches from donation centres through to hospital blood banks. The blood supply chain has three main stages: Collection, which involves recruiting and retaining blood donors, encouraging them to attend donor sessions and transporting the donated blood. Processing, which breaks blood down into its constituent parts. Distribution, which transports blood from blood centres to hospitals in response to both routine and emergency requests Inventory accumulates at all three stages, as well as in individual hospitals' blood banks. Within the supply chain some, less than 10 per cent, of donated red blood cells are lost. Much of this is due to losses in processing, but around 5 per cent is not used because it has become unavailable', mainly because it has been stored for too long. Part of the inventory management task is to keep this 'time expired' loss to a minimum. In fact most blood is lost when it is stored in hospital blood banks that are outside the service's direct control. Also, blood components will deteriorate over time. Platelets have a shelf life of only five days and demand can fluctuate significantly, which makes stock control particularly difficult. Even red blood cells, which have a shelf life of 35 days, may not be acceptable to hospitals if they are close to their use by date". Stock accuracy is crucial. Giving a patient the wrong type of blood can be fatal. At a local level demand can be affected significantly by accidents. One serious accident involving a cyclist used 750 units of blood, which completely exhausted the available supply (miraculously, he survived). Largescale accidents usually generate a surge of offers from donors wishing to make immediate donations. There is also a more predictable seasonality to the donating of blood, however, with a low period during the summer vacation. During public holidays and sporting events blood donations drop. For example, on one day when the football World Cup quarter-final and Andy Murray's (a British tennis player) Wimbledon semi-final coincided, there was a 12 per cent drop in donations compared with the previous year. The summer of 2012 proved particularly difficult, with a cluster of events and public holidays between April and August, including the Queen's Jubilee, Euro 2012, the London Olympic Games and the Paralympic Games. Not only did these events reduce donations (supply), the increased number of visitors to London increased demand. Before the period, NHS Blood and Transplant said that the number of major events would create a perfect storm and dramatically impact the number of blood donations coming in.