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
Additional Requirement
The problem is about Operations Management, particularly to Supply Chain Management. The problem 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.