Wood County Hospital consumes 400 boxes of bandages per week. The price ofbandages is $80 per box, and the hospital operates 52 weeks per year, 7 days a week.
Thecost of processing an order is $64 and cost of capital is 20% (cost of carrying $1 worth of inventory for one year is $0.20).
a. What is the Best Q (Economic Order Quantity, Order Size) and why=?
Answer:
Q = (2*S*R/H)^(1/2), S= $64, R = 400 per week X 52 Weeks = 20800, H = 80 X 0.2( Holding inventory Cost for $1, and one unit bandage cost is $80), So Q = 408
To Read More / Full Solution
No comments:
Post a Comment