Question

Question 18

A large hospital uses a certain intravenous solution that it maintains in inventory. Assume the hospital uses reorder point method to control the inventory of this item. Pertinent data about this 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 number in the following options.

Question 19

If the hospital orders 400 units each time, what’s the total annual 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 it maintains in inventory. Assume the hospital uses reorder point method to control the inventory of this item. Pertinent data about this 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 number in the following options.

Question 20

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

Question 20 options:

	4689
	4129
	5188
	6000

Answer 1

answer:

given data:

• Week after week request estimate, d = 1000
• StDev of the week after week estimate, σ = 100
• Normal lead time, L = a month
• Administration level = 0.90 so Z = NORMSINV(0.90) = 1.28
• ROP = d * L + Z * σ * √L = 10004 + 1.28100*SQRT(4) = 4,256
• now we are determine the one bye one below

18.

• Typical misfortune work, L(Z) comparing to 90% serivce level = 0.048
• Expected deficiency per cycle (ESC) = L(Z) * σ * √L
• = 0.0473100SQRT(4)
• = 9.6
• Yearly shotage = ESC x no. of cycles yearly
• = 9.6 x (52000/400)
• = 1248

  1248

19.

• Deficiency cost = Annual lack x lack cost per unit
• = 1248 x $10
• = $12,480
• Request amount, Q = 400
• Holding cost per unit per annum, H = $52 * 25%
• = $13
• Yearly interest, D = 1000 x 52 = 52,000
• Requesting cost, S = $20
• Cycle stock holding cost = Q * H/2
• = 400*13/2
• = $2,600
• Requesting cost = (D/Q) * S
• = (52000/400) * 20
• = $2,600
• Wellbeing stock expense = Safey stock * H
• = 1.28100SQRT(4) * 13
• = $3,328
• Add up to cost = $2,600 + $2,600 + $12,480 + $3,328
• = $21,008

  $21008

20.

• L = 4
• σL = 0.5
• The accompanying equation for ROP will apply.
• ROP = d * L + Z * √(σ2.L + d2.σL2)
• = 10004 + 1.28SQRT((100^2)4 + (10000.5)^2)
• =4,689

  4689