ques 9

HCA dispenses 55,000 bottles of brand name pharmaceutical annually. The optimal safety stock (which is on hand initially) is 1,000 bottles. Each bottle costs the center $2, inventory carrying costs are 10%, and the cost of placing an order with its supplier is $20. [a] What is the economic order quantity? [b] What is the maximum inventory for this medication? [c] How often must the center order (in days)? [d] How many orders of this pharmaceutical will need to be placed each year?

ordering cost F $20, Annual usage in units S 55,000, Annual carrying costs C 100%, Purchase price per bottle P $2.00, Days per year W 360, Safty stock SF 1,000

a. EOQ, b. Maximum inventry= , c. Average daily usage= Reorder frequency=, d. Orders per year