Question: A large hospital uses a certain intravenous solution that it maintains in inventory. Pertinent data about this item are as follows: Forecasted daily usagea =

A large hospital uses a certain intravenous solution that it maintains in inventory.
Pertinent data about this item are as follows:
Forecasted daily usagea =50 units
Forecast error std. dev.b =15 units
Average lead time =7 days
Lead time std. dev.b =2 days
Annual carrying cost=30%
Procurement cost per order= $50
Stockout cost = $15 per unit
Product value=$45 per unit
In-stock probabilityc=85%

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