Inputs
	Enter data in yellow shaded areas.
	Lead Time (Weeks)
	Cycle-Service Level (enter as decimal or with % sign)
	Demand per Week
	Demand During Lead Time	0
	Standard Deviation of Demand/Week
	Std Dev of Demand During Lead Time	0
	Working weeks per year	52
	Holding Cost
	Unit Cost
	% of Unit Cost for Holding Cost
	Order Cost
	Economic Order Quantity	#DIV/0!

Please fill in yellow blanks..

A community hospital in Southeast Ohio consumes 1,000 boxes of bandages per week. The price of bandages is $35 per box, and the hospital operates 52 weeks per year. The ordering cost is $15, and the cost of holding one box is 15% of the price of the material. The lead time to receive materials is 2 weeks.

CERTAIN DEMAND (SET STANDARD DEVIATION TO 0)

1. Currently, the hospital orders bandages in lot sizes of 900 boxes for total costs of $3,229.16.
   1. Calculate the EOQ quantity using OM explorer. Enter 50% for cycle-service level on Inputs tab. What is the EOQ quantity? (see Inputs tab)
   2. What are the costs for this EOQ quantity? (see Results tab)
   3. How much money could the hospital save by using the EOQ quantity instead of the lot size of 900?
2. What happens to the EOQ quantity when the unit price doubles? How does that change the ordering behavior of the manager? Why does that make economic sense?
3. What happens to the EOQ quantity if the ordering costs go down by 20% - to $12 per order (use original unit price, $35/box)?
4. The EOQ is the optimal lot size that minimizes the sum of holding & ordering costs. Is there any reason a company wouldnt want to use the EOQ?