Oakwood Hospital is considering using ABC analysis to classify laboratory SKUs into three categories: those that will be delivered daily from their supplier (Class A items), those that will be controlled using a continuous review system (B items), and those that will be held in a two-bin system (C items). The following table shows the annual dollar usage for a sample of eight SKUs. Rank the SKUs, and assign them to their appropriate category. SKU Code Dollar Value Annual Usage 1 2 3 4 5 6 7 8 $0.01 $0.03 $0.45 $1.00 $4.50 $0.90 $0.30 $1.50 1,200 120,000 100 44,000 900 350 70,000 200

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The International Organization for Standardization is the first globally recognized standard related to risk management: a) True b) False

A regional distributor purchases discontinued appliances from various suppliers and then sells them on demand to retailers in the region. The distributor operates 5 days per week, 52 weeks per year. Only when it is open for business can orders be received. The following data are estimated for a counter-top mixer: Average daily demand 1d2 = 100 mixers Standard deviation of daily demand 1sd2 = 30 mixers Lead time 1L2 = 3 days Holding cost 1H2 = $9.40>unit>year Ordering cost 1S2 = $35>order Cycle@service level = 92 percent The distributor uses a continuous review Q system. a. What order quantity Q, and reorder point, R, should be used? b. What is the total annual cost of the system? c. If on-hand inventory is 40 units, one open order for 440 mixers is pending, and no backorders exist, should a new order be placed?