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Wood County Hospital consumes 400 boxes of bandages per week. The price of bandages is $80 per box, and the hospital operates 52 weeks per year, 7 days a week.
The cost of processing an order is $64 and cost of capital is 20% (cost of carrying $1 worth of inventory for one year is $0.20).
a. What is the Best Q (Economic Order Quantity, Order Size) and why?
b. Average time a box of bandage is stored in the warehouse
Additional Requirement
The question belongs to Operations Management and it defines at the best economic order quantity and the average time a box of bandage can be stored in a warehouse.
Word Limit 300
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