## Related questions with answers

A hospital must order the drug Porapill from Daisy Drug Company. It costs $500 to place an order and$30 to review the hospital’s inventory of the drug. Annual demand for the drug is N(10,000, 640,000), and it costs $5 to hold one unit in inventory for one year. Orders arrive one month after being placed. Assume that all shortages are backlogged. a. Estimate R and the number of orders per year that should be placed. b. Using the answer in part (a), determine the optimal (R, S) inventory policy. Assume that the shortage cost per unit of the drug is$100.

Solution

VerifiedFor this problem, we are asked to estimate *R* and the number of drugs the hospital must order. Also, we are asked to identify the optimal (R,S) inventory policy considering that the shortage cost per unit is $100.

## Create an account to view solutions

## Create an account to view solutions

## Recommended textbook solutions

#### Introduction to Operations Research

10th Edition•ISBN: 9780073523453Frederick S. Hillier#### Operations Research: Applications and Algorithms

4th Edition•ISBN: 9780534380588 (7 more)Wayne L Winston#### A Mathematical Look at Politics

1st Edition•ISBN: 9781439819838Daniel H. Ullman, E. Arthur Robinson Jr.## More related questions

1/4

1/7