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A hospital manager knows the surgical glove has a Normal distribution with a mean of five...

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General Management

A hospital manager knows the surgical glove has a Normaldistribution with a mean of five boxes of surgical gloves per dayand a standard deviation of one-half box of surgical gloves perday. Two days are required to fill an order surgical glove andordering cost is $10 per order, annual holding cost is $10 per box.The hospital reorders when the surgical gloves on hand and on orderis 12 boxes.

1. Calculate the risk of a stock-out during a lead time.

2. What shortage risk doesthe hospital incur if it orders 36 boxes when the amount on handis 12 boxes If a fixed interval of seven days is used forreordering?

Answer & Explanation Solved by verified expert
4.2 Ratings (618 Votes)
Daily demand d 5 SD of daily demand s 05 onehalf box Lead time L 2 days Average demand during lead time dL 52 10 SD of demand during lead time ssqrtL    See Answer
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