Calculation Of Economic Order Quantity

Question

Wood County Hospital consumes 400 boxes of bandages per week. The price of bandages is $80 per box, and the hospital operates 52 weeks per year, 7 days a week.
The cost 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?
b.   Average time a box of bandage is stored in the warehouse

Summary

The question belongs to Operations Management and it discusses about the best economic order quantity and the average time a box of bandage can be stored in a warehouse.

Total Word Count 240

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