Minimize the annual inventory cost

Assignment Help Operation Management

Reference no: EM131143091

The Peace Care Hospital uses 3,500 boxes of sterile bandages per month. The annual holding cost rate per year is 20% of the acquisition price. A typical box of sterile bandages costs $14.50 to purchase. The ordering cost is $25 each time an order is placed, regardless of the order quantity. There is storage space for at most 750 boxes of bandages at any time. The hospital operates 365 days per year. Peace Care Hospital would like to use the EOQ model.

a) How many boxes of sterile bandages should be ordered each time an order is placed if they want to minimize the annual inventory cost?

b) How many orders per years should be expected?

c) What is the expected total inventory (holding and ordering) cost per year?

d) How many days should one order last on average?

Reference no: EM131143091

Questions Cloud

Deeply ingrained assumptions-generalizations : "Deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action are called:" Ethics Psychological contract Mental Models Pygmalion effect

Competitive advantages-market niche and positioning strategy : COMPETITIVE ADVANTAGES List the competitive advantages of the product, service or organization and focus on: the things that make it different from competitors in positive ways. MARKET NICHE AND POSITIONING STRATEGY Describe the market niche of your ..

Should the medical community adopt system : Should the medical community adopt a system whereby each person has a Universal Electronic Medical Record? Discuss possible benefits and drawbacks from a legal and ethical standpoint.

The task are drawing up finacial budget : Identify 5 positive risks and 5 negative risks for each of these task tasks. The task are drawing up a finacial budget for the opening of a coffee shop, like how much financing is required and accessing which fucding is available.

Minimize the annual inventory cost : The Peace Care Hospital uses 3,500 boxes of sterile bandages per month. The annual holding cost rate per year is 20% of the acquisition price. A typical box of sterile bandages costs $14.50 to purchase. How many boxes of sterile bandages should be or..

Describe the advantages of starting business as team : As the founder of a new venture, examine your team-building skills to lead a new venture team. In a three- to four-page paper, not including the title and reference pages, identify key characteristics of individuals you would select to be members of ..

Labor-stamping capacity and testing capacity : Harkin Electronics is planning its production for the next quarter for its two product lines, relays and capacitors. The profit contribution is $250 for a case of relays and $200 for a case of capacitors. To maximize total profit next quarter, how ma..

Funding and policies that ensure universal access : Compare and contrast the following three national healthcare systems. Discuss key issues such as funding and policies that ensure universal access. How are these compare to the healthcare system in the U. S.?

User Account

All Pages