Explore BrainMass

Inventory Management in Hospital Supplies

Please provide an answer to the problem below and make sure to show all the work as to how the answer was derived.

Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level.

a. What safety stock level do you recommend for BX-5?
b. What is the appropriate reorder point?

Solution Preview


Please see response to your posting as given below.

Mean demand during lead time = 60
Standard deviation of demand = 7

Service level required = 90%
For 90% find out value Z from ...

Solution Summary

Solution describes how to calculate safety stock and reorder point.