You are the supervisor of the Molecular lab. Once a month 10 HIV viral load test kits are received on a standing order (i.e. you have contracted with the manufacturer to have 10 kits shipped, at a cost of $1000/kit). Every month you must discard one of the kits because it outdates. (These kits only have a short outdate.) However, that forces you to purchase at least one kit outside of the regular contracted purchase price of $1000/kit. You must pay $1200/kit for the additional kit. Analyze the situation and suggest how you could solve the problem, while keeping the solution cost effective

formulas

Consumable costs per profile = reagent cost number of profiles

QC labor costs per profile = (#QC tests performed X labor costs) #profiles done per year

Leasing costs for 5 years = 5 X (reagent costs x # samples per day X # days per year)

Purchasing costs for 5 years =

Instrument cost + (4 X service agreement cost) + [5 X (reagent costs X #samples per day X #days per year)]