Scenario: Inventory Analysis of a Surgical Company

Question

SURGERY ASSOCIATES, a local surgery practice group, orders implants from device manufacturers. Order quantities for ten items have been determined based on the past two years of usage. Other relevant information from the practice's inventory records is depicted in Table. The practice is functional for fifty-two weeks a year.

a. Perform basic EOQ analysis for each item

b. Classify the implant inventory items according to the ABC analysis.

c. Calculate the yearly inventory management cost.

d. Determine the investment cost (per cycle) for each item.

 Implant item No. Yearly Demand (Units/Yr) Unit Cost Yearly Carrying rate of each item ordering cost 1 104 2225 12% 6.00 2 260 5000 10% 5.00 3 728 3550 8% 12.00 4 1248 1205 12% 28.00 5 104 11100 2% 18.00 6 1040 1500 20% 32.00 7 780 1900 11% 50.00 8 884 3700 9% 12.00 9 780 6400 2% 35.00 10 520 2700 5% 12.00

Summary

The question is about Operations Management, particularly to Supply Chain Management. The question is about a surgical company wants to calculate its inventory analysis. For this analysis, ABC analysis, yearly inventory management cost and investment cost per cycle for each item has been calculated.

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