Question: A large hospital uses a certain intravenous solution that it maintains in inventory. Assume the hospital uses reorder point method to control the inventory of
A large hospital uses a certain intravenous solution that it maintains in inventory. Assume the hospital uses reorder point method to control the inventory of this item. Assume the hospital operates weeks per year. Pertinent data about this item are as follows:
Forecast of demand units per week
Forecast error std dev. units per week
Lead time weeks
Carrying cost per year
Purchase price, delivered $ per unit
Replenishment order cost $ per order
Stockout cost $ per unit
Instock Probability during the lead time
Due to possible rounding effect, please pick the closest number in the following options.
If the hospital orders units each time, what's the annual stockout cost?
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