Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug.
Demand (D) |
85 tablets/week |
Working weeks per year |
52 weeks |
Unit holding cost per year (H) |
$6 |
Order cost (S) |
$44/order |
Standard deviation of weekly demand (sd) |
15 tablets |
Lead time (L) |
2 weeks |
Desired cycle service level |
95% |
- If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point?
- If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
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