Question 18

A large hospital uses a certain intravenous solution that itmaintains in inventory. Assume the hospital uses reorder pointmethod to control the inventory of this item. Pertinent data aboutthis item are as follows:

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Forecast of demand^a = 1,000 units per week

Forecast error^a, std. dev. =100 units per week

Lead time = 4 weeks

Carrying cost = 25 % per year

Purchase price, delivered = $52 per unit

Replenishment order cost = $20 per order

Stockout cost = $10 per unit

In-stock Probability during the lead time =90%

^a Normally distributed

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Due to possible rounding effect, please pick the closest numberin the following options.

Question 19

If the hospital orders 400 units each time, what’s the totalannual costs (holding cost + ordering cost + stock-out cost)excluding purchasing costs?

Question 19 options:

	10000
	21008
	31008
	42016

Use the following information to answer questions 17-20.

A large hospital uses a certain intravenous solution that itmaintains in inventory. Assume the hospital uses reorder pointmethod to control the inventory of this item. Pertinent data aboutthis item are as follows:

------------------------------------------------------------

Forecast of demand^a = 1,000 units per week

Forecast error^a, std. dev. =100 units per week

Lead time = 4 weeks

Carrying cost = 25 % per year

Purchase price, delivered = $52 per unit

Replenishment order cost = $20 per order

Stockout cost = $10 per unit

In-stock Probability during the lead time =90%

^a Normally distributed

------------------------------------------------------------

Due to possible rounding effect, please pick the closest numberin the following options.

Question 20

If the lead time is normally distributed with a mean of 4 weeksand a standard deviation of 0.5 weeks, what’s the reorderpoint?

Question 20 options:

	4689
	4129
	5188
	6000