quiz03 - cost(20 b With the EOQ obtained in part a please...

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Quiz OM 301–002 Spring 2010 Quiz #3 (due on 4/12) A hospital emergency room opens 24 hours a day and 365 days a year. According to historical data, the daily demand of examination gloves follows a Normal distribution with a mean of 30 boxes and a standard deviation of 15 boxes. It takes exactly 24 hours to obtain more boxes of examination gloves from a medical JIT supplier. While the ordering cost is $3/order, the daily holding cost is 5 cents/box. Please use the given data above to answer the following questions with proper calculations. a) Find the Economic Order Quantity (EOQ) that minimizes annual total inventory
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Unformatted text preview: cost. (20%) b) With the EOQ obtained in part a), please calculate i) the annual total ordering/setup cost and ii) the annual total carrying/holding cost for this inventory system. (30%) c) Find the “lead time demand” distribution (i.e., its mean, standard deviation, and type of distribution). (20%) d) What is the reorder point to guarantee a stockout probability to be no more than 0.001 under this stochastic demand? (20%) e) What is the stockout probability if we set the reorder point at 60 boxes? (20%)...
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This note was uploaded on 09/21/2011 for the course OM 301 taught by Professor Naor during the Fall '09 term at George Mason.

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