A large hospital buys a specialized, single use medical grade plastic container for its use in the Operation Theaters. The plastic containers are available from a few suppliers and one unit of the box costs Rs. 2,000. The surgical sections (including the operating theaters) in the hospital work for 250 days a year and the daily consumption rate is four boxes. The suppliers take 7 working days to replenish an order. The ordering cost is Rs. 2,000 per order and the carrying cost is 20 percent. The hospital has been utilizing an Economic Order Quantity (EOQ) model for inventory planning with respect to these boxes. The supplier has of late introduced a Minimum Order Quantity (MOQ) restriction for all its buyers based on some internal exercise. The MOQ is 150 boxes. In the meantime, the hospital plans to launch some improvement initiatives. This will bring down the ordering cost by 20 percent. The hospital may need to spend a sum of Rs. 10,000 towards these initiatives. A new supplier is willing to supply the plastic containers without any MOQ restrictions. In view of this information, answer the questions given below by choosing an appropriate option.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
A large hospital buys a specialized, single use medical grade plastic container for its use in the Operation Theaters. The plastic containers are available from a few suppliers and one unit of the box costs Rs. 2,000. The surgical sections (including the operating theaters) in the hospital work for 250 days a year and the daily consumption rate is four boxes. The suppliers take 7 working days to replenish an order. The ordering cost is Rs. 2,000 per order and the carrying cost is 20 percent. The hospital has been utilizing an Economic Order Quantity (EOQ) model for inventory planning with respect to these boxes. The supplier has of late introduced a Minimum Order Quantity (MOQ) restriction for all its buyers based on some internal exercise. The MOQ is 150 boxes. In the meantime, the hospital plans to launch some improvement initiatives. This will bring down the ordering cost by 20 percent. The hospital may need to spend a sum of Rs. 10,000 towards these initiatives. A new supplier is willing to supply the plastic containers without any MOQ restrictions. In view of this information, answer the questions given below by choosing an appropriate option.
Which of the statements will be true if the hospital uses an EOQ model for ordering the boxes?
If the hospital places an order it will last for 25 days
The maximum inventory of boxes in the hospital will be 50 boxes
The total cost of ordering will be more than the total cost of carrying inventory
All of the above
What will be the impact of the MOQ restriction imposed by the supplier on the hospital?
The total ordering cost for the hospital will increase
The total cost (of ordering + carrying) for the hospital will decrease
The total carrying cost for the hospital will increase
The Hospital will not be affected in anyway
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