The case deals about the culture of quality at Hospital AP. It is founded in 1989 with 431 bed in two facilities totaling 676,000 square feet. Quality health care is a goal. Continuous improvement such as morbidty, readmission rates, costs per case, infection rate, and the length of stays, which are the measures of the hospital. To determine: why it is important for Hospital AP to get a patient assessment.

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Sam's Pet Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: > Demand 70 bags/week > Order cost $58.00/order > Annual holding cost 30 percent of cost > Desired cycle-service level = 80 percent >Lead time 4 weeks (24 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

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Chapter 6, Problem 1.1VC

Summary Introduction

Case summary:

The case deals about the culture of quality at Hospital AP. It is founded in 1989 with 431 bed in two facilities totaling 676,000 square feet. Quality health care is a goal. Continuous improvement such as morbidty, readmission rates, costs per case, infection rate, and the length of stays, which are the measures of the hospital.

To determine: why it is important for Hospital AP to get a patient assessment.

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Sam's Pet Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: > Demand 70 bags/week > Order cost $58.00/order > Annual holding cost 30 percent of cost > Desired cycle-service level = 80 percent >Lead time 4 weeks (24 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

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