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Management Studies

Our hospital uses expensive hip replacement kits. For one particular kit; annual demand is 32 per year on a steady basis. Purchase cost is $17,000, ordering cost is $4,500 regardless of the quantity, carrying cost is $400 per month for each kit and the lead time is 6 weeks.

A) What is the EOQ for these kits?

B) What is the reorder point level?

C) If there were a 20% discount on purchases of 10 or more, how would our ordering change?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92031931

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