You have been hired as a business consultant to Kidney Care USA. You are to submit a short

MEMO to the company to address their concern to lower inventory costs. See the example of a

MEMO below.

Kidney Care USA is a new kidney dialysis center. Since they are a start$-$up they must be

financially wise in the use of funds. Even though there are many consumables used, they are

interested to use an inventory control model as a pilot on gloves. If the results work out well,

then they may even purchase inventory management software to track all consumables.

Already the management has given thought to simplifying the number of brands, sizes, and

styles of products. For gloves, they have decides to go with a one$-$size fits all in a nitrile

powder$-$free gloves since there can be an allergic reaction to latex. The dialysis center is open $6$

days a week for $52$ weeks a year. The center has six chairs and employees three technicians per

shift. The operating hours are $7$:$00$ am to $8$:$00$ pm$.$ Patients can die if they do not receive

timely treatment. When an order it placed it takes two days to receive the order. The data they

have to date are the following:

Boxes of gloves used per week are $12.$

The cost to place an order is $$2\mathrm{.}17$

The lead$-$time to receive the order is three days.

The gloves cost $$5\mathrm{.}00$

Carrying cost is $.2$ or $20\%.$

Determine the EOQ.

Calculate the annual carrying cost.

Calculate the annual order cost.

Determine the number of orders placed per year.

Determine the reorder point. In other words, when the number of boxes gets to what level, do

you place the order.