Reference no: EM132810306

Question 1. A hospital orders surgical supplies using a fixed order interval system. Suppose that just prior to ordering, a check of rolls of gauze bandages shows that there are 40 currently on hand. Suppose also that these rolls have a daily usage that is approximately normal with a mean of 9 rolls and a standard deviation of 4 rolls. Lead time is 4 days and the desired service level is 98 percent. The order interval is 12 days.A hospital orders surgical supplies using a fixed order interval system. Suppose that just prior to ordering, a check of rolls of gauze bandages shows that there are 40 currently on hand. Suppose also that these rolls have a daily usage that is approximately normal with a mean of 9 rolls and a standard deviation of 4 rolls. Lead time is 4 days and the desired service level is 98 percent. The order interval is 12 days.

A. How many rolls of gauze bandages should be ordered for this period? *
B. How many units would be the safety stock? *
C .What's the expected demand during the order interval and lead time? *
D. What would have been the desired service level if an order quantity of 142 rolls were placed when the stock on hand is 30 rolls? (Assume: amount on order and backorder is zero). *

Question 2. Item X is a standard item stocked in a company's inventory of spare parts. Each year, the firm uses about 2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The company operates 360 days per year and Item X is received 9 days after placement of order.

A. How many units of Item X should be ordered each time? *
B. When should Item X be ordered? *
C. Whenever Item X's inventory level drops to 50 units
D. How many times per year would Item X be ordered? *
E. What is Item X's average inventory level? *
F. How much would be Item X's total annual purchasing cost? *
G. How much would be Item X's total annual procurement cost? *
H. How much would be Item X's total annual storage cost?
I. How much would be Item X's total annual stockout cost? *
J. Including its total annual purchasing cost, how much would be Item X's total annual inventory cost?