The Neurology Unit of DT Medical Centre uses the EOQ model when ordering their supplies. Recently,...

 

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The Neurology Unit of DT Medical Centre uses the EOQ model when ordering their supplies. Recently, many doctors expressed their dissatisfaction about the lack of medicine supplies for stroke patients. Three months ago, doctors in-charge in the emergency ward had to use a substitute medicine that was not curative. This problem encouraged the office-in-supply department to re-examine the present inventory policy. The officer managed to collect the following data: per year. Required: b. Cost of ordering and receiving one order Cost of storing one pack of medicine Average use per day Maximum use per day Lead time for one order Annual requisition The emergency unit currently does not have any safety stock. This hospital operates 365 days C. Calculate: Economic Order Quantity (EOQ). RM180 RM750 Re-order point. 30 small bottles 40 small bottles 8 days 7300 small bottles (5 marks) (5 marks) How much total ordering cost and total handling inventory cost must the emergency unit bear based on the present inventory policy? (8 marks) Assume that the Emergency Unit intends to store safety stock for that medication. Calculate the total ordering cost and total handling inventory cost based on this new policy. The Neurology Unit of DT Medical Centre uses the EOQ model when ordering their supplies. Recently, many doctors expressed their dissatisfaction about the lack of medicine supplies for stroke patients. Three months ago, doctors in-charge in the emergency ward had to use a substitute medicine that was not curative. This problem encouraged the office-in-supply department to re-examine the present inventory policy. The officer managed to collect the following data: per year. Required: b. Cost of ordering and receiving one order Cost of storing one pack of medicine Average use per day Maximum use per day Lead time for one order Annual requisition The emergency unit currently does not have any safety stock. This hospital operates 365 days C. Calculate: Economic Order Quantity (EOQ). RM180 RM750 Re-order point. 30 small bottles 40 small bottles 8 days 7300 small bottles (5 marks) (5 marks) How much total ordering cost and total handling inventory cost must the emergency unit bear based on the present inventory policy? (8 marks) Assume that the Emergency Unit intends to store safety stock for that medication. Calculate the total ordering cost and total handling inventory cost based on this new policy.

Answer rating: 100% (QA)

Economic Order Quantity EOQ is the order quantity at which cost of ordering inventory and cost of holding inventory are equal Also at this ordering qu... View the full answer