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Schaan Healthcare Products is a distributor of medical/surgical products in Saskatchewan. Schaan has a warehouse in Saskatoon that carries thousands of items, one of which is item #345-5870, Micro-Touch Surgical Glove, size 7. The demand for this item (in cases) during a September to November period was 25, 57, and 50, respectively. Schaan's inventory manager uses a three-month moving average to forecast next month's demand for the items. The three-month moving average forecast for December's demand for size 7 gloves is 44 cases. Suppose that he uses the EOQ/ROP model to replenish this item. The surgical gloves are purchased from Ansell Limited in cases of 200 units at a cost of $120 per case. Using the three-month moving average forecast for December, ordering cost of $15 per order, inventory holding cost rate of 15 percent per year, and purchase lead time of two days,
Calculate the EOQ for this item (rounded to a whole number).
In fact, Schaan uses the fixed-interval model for replenishing this item.
Calculate the order up to level (Imax) for this item (rounded to a whole number) if it is ordered every two weeks and the desired service level is 94 percent.
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