For the next problem: review all the inventory models we have discussed to date to help you choose how to solve the problem. Health Guard Clinic is a network of 20 mobile medical clinics. The mobile clinics serve the medical needs of insured employees of client organizations in remote locations of the country where local healthcare facilities are inaccessible or substandard. The resident doctor at the Homel mobile clinic insists that commonly prescribed medicines be well-stocked and always available on-site to fill prescriptions with no patient wait. Wanting to set a very high patient service level, the doctor is currently demanding hydrochlorothiazide (a drug used to treat high blood pressure) be readily available and dispensable at all times in the clinic. Currently, all medical supplies are delivered from headquarters by a chartered flight to the mobile clinics. The supply is guaranteed with a three day lead time due to priority accorded to medical supplies on board the plane. The doctor, however, believes patients should not need to wait three days before the next batch of stock comes in. The procurement manager for the clinic is concerned about the holding costs of the medicines by keeping so much inventory on site as well as the possibility of the expiration of any of the onhand medicines and the limited inventory stocking space available for the mobile clinic. Currently, there is a 96.7% service level on dispensing hydrochlorothiazide (which is just one of many drugs stocked to treat high blood pressure). The doctor is demanding a 99% service level. At Health Guard Clinics, the medical teams report directly to the company's medical director whose priority is to meet the medical needs of the patients. The doctors are thus incentivized by the medical service outcome and do not have any financial key performance indicator measures. On the contrary, the administrative staff is held responsible for the financials but car only work within the boundaries set by the medical team. The following data has been collected to assist in your analysis: - The holding cost used at Health Guard is composed of a storage and financing cost. The storage cost is $0.10 per unit per year and the financing cost is 10% of the cost of the medical supplies. - The ordering cost has been assessed at \$20. - A box of hydrochlorothiazide costs $10. - Annual demand is given at 100,000 boxes. Currently, the clinic uses a continuous review system. Questions: 1. Calculate the EOQ and cycle length given the annual demand figure of 100,000 boxes. 2. Using the past seven-months' data as the benchmark, calculate the mean daily demand and standard deviation (there are 151 days of actual data given). 3. What is the re-order quantity at the current service level. Compare that value to those obtained using a 97.5% and then 99% service level. 4. Suppose the clinic implements the continuous review system with 97.5%. What are the average stock and maximum stock and expected number of stockouts? How does the continuous review system compare to the current system? 5. Now suppose the clinic implements the continuous review system with 99%. What are the average stock and maximum stock and expected number of stockouts? How does the continuous review system compare to the one with 97.5% service level? 6. Which system optimizes the total cost of ownership? 7. What is the impact of the service level target on stock quantity and cost? 8. How can the clinic resolve the dilemma and enhance its inventory allocation and service levels when considering not just economic factors but public health, safety, welfar cultural, global, social, and environmental factors as well? What service level would you recommend and why? (be specific)