Wood County Hospital consumes 1,000 boxes of bandages per week. The price of bandages is $35 per
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a. The hospital orders bandages in lot sizes of 900 boxes. What earn cost does the hospital incur, which it could save by using the EOQ method?
b. Demand is normally distributed, with a standard deviation of weekly demand of 100 boxes. The lead time is 2 weeks. What safety stock is necessary if the hospital uses a continuous review system and a 97 percent cycle-service level is desired? What should be the reorder point?
c. If the hospital uses a periodic review system, with P = 2 weeks, what should be the target inventory level, T?
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Related Book For
Operations management processes and supply chain
ISBN: 978-0136065760
9th edition
Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra
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