Health Care Operation Management
1. Your hospital needs to order Kleenex and the supply chain manager is going to use Economic Order Quantity (EOQ) to determine how much to order based on the following information
Cost of Kleenex - $10/case*
Carrying cost - $0.42/box
Cost of ordering - $100/order
Lead time - 2 weeks
Annual Demand - 500 cases/year
*case = 24 boxes of Kleenex
Please use the inventory excel document attached as a tool to work through the questions below: Inventory Discussion.xlsPreview the document
What quantity should the manager order?
How often should the order be placed?
When should the order be placed?
If the manager set up a two-bin system for Kleenexes, how many cases would be in each bin?
2. Discuss the challenges of implementing SCM in a healthcare organization and how they can overcome these challenges?
| Annual demand | D = | 500 | units/year | |||
| Ordering cost per order (Setup) | S = | 100 | $/order | |||
| Annual carrying cost per unit | H = | 0.42 | $/unit-year | |||
| Working days per year | = | 365 | days/year | |||
| Economic Order Quantity | EOQ = | 487.950036 | units | |||
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| Actual order quantity | Q = | 500 | ||||
| Increment | DQ = | |||||
| Number of orders per year | D/Q = | 1.0 | orders/year | |||
| Length of order cycle (days) | Q/D = | 365.0 | days | |||
| Average inventory | Q/2 = |
250...
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