1. The Anderson Palmer Hospital would like to reduce the cost of its inventory by calculating the optimal order size for hypodermic needles. On average, the hospital uses 80 needles per month, the cost of placing an order is $14, and holding cost is estimated to be $1.20 per needle per year. Using the EOQ formula, the optimal order size is:

   about 40 needles.

   about 60 needles.

   about 130 needles.

   about 150 needles.

0.5 points

QUESTION 9

1. As the ratio of arrival rate to service rate is increased, which of the following is likely?

   Utilization increases and customers must wait longer in the queue.

   Utilization is decreased because of the added strain on the system.

   The average number in the system decreases.

   Customers move through the system in less time because utilization is increased.

   None of the above.