Explain qualitatively how re-order points

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Reference no: EM13224826

Please show all work and use a table in structuring a quanlitative answer

An in-hospital pharmacy orders medication from a distributor.

Consider 2 Medications : A and B

A is 100 times more expensive per dose than B. The demand for B inside the hospital is about 10 times higher than for A, but the coefficient of variation in demand for A is higher than for B. Lead time for A is longer for B.

Suppose pharmacy uses "Continuous review ststem" for these two medications, reordering the medication when the inventory on-hand dips below the re-order point. Explain qualitatively how re-order points and order size would be influenced by the difference in the costs of medication, patterns of use, lead time. A table works well in structuring an answer.

Reference no: EM13224826

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