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Would County Hospital consume 2000 boxes of bandages per week. The price of bandages is $35 per box, and the hospital operates 52 weeks per
Would County Hospital consume 2000 boxes of bandages per week. The price of bandages is $35 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a yearis 15 percent of the value of the material.
- The hospital orders bandages in lot sizes of 1000 boxes. What extra cost does the hospital incur, which it could saveby using the EOQ method?
- Demand is normally distributed, with a standard deviation of weekly demand of 100 boxes. The time is 2 weeks. What safety stock is necessary if the hospital uses a continuous review system and a 90 percent cycle-service levelis desired? What should be the reorder point?
- If the hospital uses a periodic review system, with T = 4 weeks, what should be the target inventory level, q?
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