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. Assume the hospital operates 52 weeks per year. Pertinent data about this item are as follows: Forecast of demanda = 1,000 units per week Forecast errora, std. dev. =50 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 =90% a Normally distributed Due to possible rounding effect, please pick the closest number in the following options. If the hospital orders 800 units each time, what's the expected number of units out of stock annually? 1248 312 156 624

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