A HEALTH CENTER IN SHARJAH USES SYRINGES FOR THEIR IMMUNIZATION CAMPAIGN. OVER THE PAST TWO YEARS, THEY USED 40,000 SYRINGES AT THE COST OF AED1.50/SYRINGE. QTHE CENTER ANNUALLY DISPOSES OF 500 SYRINGES DUE TO MALFUNCTIONING, WRONG DOSE, MISUSE, ETC. THEY USUALLY STORE THEM IN A STORAGE CLOSET THAT OCCUPIES 2 PERCENT OF THE HEAD NURSE’S OFFICE. THE OFFICE CONSTITUTES 10% OF THE CENTER’S SPACE WITH AN ANNUAL RENT OF AED60,000. QFOR EACH PLACED ORDER, IT TAKES ABOUT THREE HOURS FOR AN OFFICE ASSISTANT (WHOSE HOURLY WAGE IS AED12.25) TO PREPARE, COMMUNICATE THE ORDER, AND PLACE ITS SHIPMENT IN STORAGE. IN ADDITION, EACH ORDER'S OVERHEAD SHARE OF EQUIPMENT AND SUPPLIES (PHONE, FAX, COMPUTER, STATIONERY PAPER) IS APPROXIMATELY AED4.50. IN THE PAST, THE OFFICE ASSISTANT ALWAYS PLACED 5,000 SYRINGES IN EACH ORDER. THE DELIVERIES ARE MADE IN BOXES OF ONE THOUSAND SYRINGES AND ARE ALWAYS RECEIVED THREE WORKING DAYS AFTER THE ORDER IS PLACED.

QUESTIONS:

1) WHAT SHOULD BE THE EOQ FOR THE SYRINGES?

2) DETERMINE THE HOLDING COST

3) DETERMINE THE ORDERING COST

4) WHAT ARE THE INVENTORY MANAGEMENT COSTS FOR THESE SYRINGES?WHAT ARE THE INVESTMENT COSTS? HOW MANY TIMES IN A YEAR SHOULD AN ORDER BE PLACED?

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