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
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. Pertinent data about this item are as follows: Forecast of demand = 1,000 units per week Forecast error", std. dev. = 100 units per week Lead time = 4 weeks Carrying cost = 25 % per year Purchase price, delivered = $52 per unit Replenishment order cost = $20 per order Stockout cost = $10 per unit In-stock Probability during the lead time=85% Normally distributed Due to possible rounding effect, please pick the closest number in the following options. If the lead time is normally distributed with a mean of 4 weeks and a standard deviation of 0.5 weeks, what's the reorder point? 4689 5288 4560 6000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!