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A single store within a pharmacy chain orders drugs directly from the manufacturer. Because of the importance of customers getting the drugs they need, the pharmacy has a service level of 99%.
Drug A has a mean demand of 300 pills/day, with a standard deviation of 100 pills/day. Delivery time from the point the order is made to when it is delivered is 14 days. Storage of the drug at the pharmacy costs $0.10/pill/year.
(a) What is the safety stock required to keep Drug A in stock?(b) What is the re-order point for Drug A?(c) How much does the safety stock of Drug A cost the store each year?
The pharmacy chain decides to set up a distribution center for its drugs; instead of ordering the drugs from the manufacturer, the store will order the drug from a distribution center from now on. As a result, instead of taking 14 days for Drug A to get to the customer, it now takes only 2 days.
(d) What is the new safety stock?(e) How much does this new safety stock cost per year?
The economies of countries such as Russia and China have historically been operated through centralized bureaucracies
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Technology Assessment Analyze the basic technology underlying health care information systems and determine the most pressing need for innovation.
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