A HEALTH CENTER IN SHARJAH USES SYRINGES FOR THEIR IMMUNIZATION CAMPAIGN. OVER THE PAST TWO YEARS, THEY USED 40,000 SYRINGES AT THE COST OF AED1.50/SYRINGE. QTHE CENTER ANNUALLY DISPOSES OF 500 SYRINGES DUE TO MALFUNCTIONING, WRONG DOSE, MISUSE, ETC. THEY USUALLY STORE THEM IN A STORAGE CLOSET THAT OCCUPIES 2 PERCENT OF THE HEAD NURSE’S OFFICE. THE OFFICE CONSTITUTES 10% OF THE CENTER’S SPACE WITH AN ANNUAL RENT OF AED60,000. QFOR EACH PLACED ORDER, IT TAKES ABOUT THREE HOURS FOR AN OFFICE ASSISTANT (WHOSE HOURLY WAGE IS AED12.25) TO PREPARE, COMMU­NICATE THE ORDER, AND PLACE ITS SHIPMENT IN STORAGE. IN ADDITION, EACH ORDER'S OVER­HEAD SHARE OF EQUIPMENT AND SUPPLIES (PHONE, FAX, COMPUTER, STATIONERY PAPER) IS APPROXIMATELY AED4.50. IN THE PAST, THE OFFICE ASSISTANT ALWAYS PLACED 5,000 SY­RINGES IN EACH ORDER. THE DELIVERIES ARE MADE IN BOXES OF ONE THOUSAND SYRINGES AND ARE ALWAYS RECEIVED THREE WORKING DAYS AFTER THE ORDER IS PLACED.

QUESTIONS:

1. WHAT SHOULD BE THE EOQ FOR THE SYRINGES?

2. DETERMINE THE HOLDING COST

3. DETERMINE THE ORDERING COST

4. WHAT ARE THE INVENTORY MANAGEMENT COSTS FOR THESE SYRINGES?WHAT ARE THE INVESTMENT COSTS? HOW MANY TIMES IN A YEAR SHOULD AN ORDER BE PLACED?

 

Answer rating: 100% (QA)

1 What should be the EOQ for the syringes The EOQ for the syringes should be 5000 syringes This is because the office assistant always places 5000 syr... View the full answer