Question

Operation Management Class

A great area of concern is the supply of hospital ventilators. Clearly, the number of available ventilators falls far short of the projected number needed. Why is this the case? Were hospitals justified in carrying the inventory of ventilators that they did? Things to consider:

• What do you suppose the demand curve looks like for ventilator demand? Is it Normally distributed like most of our examples from class? What service level do you think would be appropriate? What are the associated costs?

• What is the lead time for new ventilators? Why is it so long and is there anything that can be done about this? What effect does this lead time have on inventory levels?

Answer 1

Service level:

This counts the best performance of the system, since this is a life-support facility.

Suppose there are three areas to be covered:

No.1) percentage of overall recovery

No.2) percentage of speedy recovery

No.3) percentage of non-failure of machining operation

Suppose in order to get the service level of the machine, each of these area must cross 80%. If atleast one area is below 80%, the service level should not be considered.

Associated cost:

In order to make the system up to date and usable, the maintenance cost is very high. It is somehow higher than operating cost. If the machine is idle for long time, it requires high maintenance cost to make the system run. This is the reason why high inventory of ventilator can’t be maintained.

Lead time:

This is time required from supply of parts to manufacturer, till the getting of ventilator. This is a long process, since most of the supply of parts come from global chain. Lead time is very high, like around 14/15 days.

Anything:

There is no substitute of ventilator; therefore, nothing can be done.

Inventory level:

Such a long lead time may affect the inventory level, but this is not only reason of lower inventory of ventilator. As discussed earlier, it is because of high maintenance cost the higher inventory level is not maintained.