Inputs

Solver - Inventory Systems Designer

Enter data in yellow shaded areas.

Periods used in calculations

Lead Time (Days)

Cycle-Service Level (enter as decimal or with % sign)

Demand per Day

Demand During Lead Time

0

Standard Deviation of Demand/Day

Std Dev of Demand During Lead Time

0

Working days per year

Holding Cost

Unit Cost

Not Requred

% of Unit Cost for Holding Cost

Not Requred

Order Cost

Economic Order Quantity

#DIV/0!

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?