Evsc Hospital Glove Simulation

EVSC Hospital Glove Simulation

Alan Young

University of Phoenix

EVSC Hospital Glove Simulation

The EVSC Glove Simulation is an exercise in economic order quantity and safety stock calculations. EVSC goals for the gloves are to minimize cost per glove, inventories, eliminate any stock-out situation and minimize safety stock inventory. The Q-model or fixed-order quantity method was used to calculate the economic order quantity data. With this data the re-order point and safety stock levels were calculated using the formulas as provided by Chase, Jacobs, & Aquilano (2005). This information was used to run the simulation and examine the results.

The initial simulation data presented current stock levels, current and historical use, standard deviation numbers and the service level requirement of 99%. Given this data, calculations were run, entered in the simulation, and performance data was processed. I over-estimated the safety stock for both sets of gloves, under-estimated demand for the surgical gloves and over-estimated the quantity ordered for the exam gloves. Both EOQ’s were less than optimum, but the choices made were the best alternatives. The result was an average cost of $0.29 each for surgical gloves, an optimum cost of $.029 each, and $0.25 for exam gloves, with an optimum cost of $0.24 each.

The second part of the simulation introduced a “Quantity Discount Schedule” and the order quantities required for the price breaks. This new data required new calculations to be run, and based on results, EOQ lot sizes increased to 4000 for both gloves, and order quantities decreased due to the excess supply from the first part of the simulation. Safety stocks for each glove were within 100 of the optimum value, and order quantities were at the same level as the optimum values. Based on these values, the average cost per unit for surgical gloves was $.01 less than the optimum value, but exam gloves stayed the same, at $.01 more than the...