The South Texas Center for Pediatric Care in San Antonio wants to reduce its inventory costs. The Centre carries vaccines (e.g., for whooping cough), non-injectable medical supplies (such as examining-table paper, alcohol swabs, tongue depressors), and office supplies (stationery, paper, and forms). Out of the 113 inventory items, seven vaccines account for approximately 70 percent of annual dollar value of $225,000. Approximately 210 whooping cough vaccines are needed per month An. office manager spends a total of approximately one half-hour finding out how much inventory of whooping cough vaccine is on hand and placing an order. She is paid approximately $17 an hour. The cost of capital for the centre is 8 percent per year, and the storage cost (including use of freezers for some items) is estimated to also be approximately 8 percent of item cost per year. A lot of 10 whooping cough vaccines costs an average of $ 160.6
a. Calculate the EOQ for whooping cough vaccines.
b. Suppose that the purchase lead time is two days and daily demand for whooping cough vaccines is Normally distributed with a mean of seven vaccines and a standard deviation of two vaccines. Calculate the reorder point if lead time service level of 98 percent is desired.
c. Suppose that the office manager wants to make the replenishment of whooping cough vaccines easier for herself by ordering them every two weeks.
i. Using the information in part b, what should the order up to level (/raa3t) be?
ii. Suppose that the Center has 34 whooping cough vaccines on hand. What should the order quantity be, given your answer to part i?