Neighborhood Pharmacy, Inc. Case Study

Neighborhood Pharmacy, Inc. Case Study

Part A

The spreadsheet for NPI’s order quantity (Q), inventory-related total cost (TC), purchase price (P), use requirement (X), order cost (Θ), and carrying cost (C) is as follows:

|1 |2 |3 | | | | | |

| | | | | | | | | | | |  |Purchase |Use |Order |Carrying |  |  |  |  |  | | |Quantity |Price |Req. |Cost |Cost |1 |  |2 |  |3 |1+2+3 | |Q |P |X |Θ |C |P x X |X/Q |Θ x X/Q |Q/2 |C x Q/2 |TC | |0 |4 |5000 |50 |0.5 |20000 |0 |0 |0 |0 | 0 | |100 |4 |5000 |50 |0.5 |20000 |50 |2500 |50 |25 | $22,525.00 | |200 |4 |5000 |50 |0.5 |20000 |25 |1250 |100 |50 | $21,300.00 | |300 |4 |5000 |50 |0.5 |20000 |16.667 |833.3333 |150 |75 | $20,908.33 | |400 |4 |5000 |50 |0.5 |20000 |12.5 |625 |200 |100 | $20,725.00 | |500 |4 |5000 |50 |0.5 |20000 |10 |500 |250 |125 | $20,625.00 | |600 |4 |5000 |50 |0.5 |20000 |8.3333 |416.6667 |300 |150 | $20,566.67 | |700 |4 |5000 |50 |0.5 |20000 |7.1429 |357.1429 |350 |175 | $20,532.14 | |800 |4 |5000 |50 |0.5 |20000 |6.25 |312.5 |400 |200 | $20,512.50 | |900 |4 |5000 |50 |0.5 |20000 |5.5556 |277.7778 |450 |225 | $20,502.78 | |1000 |4 |5000 |50 |0.5 |20000 |5 |250 |500 |250 | $20,500.00 | |1100 |4 |5000 |50 |0.5 |20000 |4.5455 |227.2727 |550 |275 | $20,502.27 | |1200 |4 |5000 |50 |0.5 |20000 |4.1667 |208.3333 |600 |300 | $20,508.33 | |1300 |4 |5000 |50 |0.5 |20000 |3.8462 |192.3077 |650 |325 | $20,517.31 | |1400 |4 |5000 |50 |0.5 |20000 |3.5714 |178.5714 |700 |350 | $20,528.57 | |1500 |4 |5000 |50 |0.5 |20000 |3.3333 |166.6667 |750 |375 | $20,541.67 | |1600 |4 |5000 |50 |0.5 |20000 |3.125 |156.25 |800 |400 | $20,556.25 | |1700 |4 |5000 |50 |0.5 |20000 |2.9412 |147.0588 |850 |425 | $20,572.06 | |1800 |4 |5000 |50 |0.5 |20000 |2.7778 |138.8889 |900 |450 | $20,588.89 | |1900 |4 |5000 |50 |0.5 |20000 |2.6316 |131.5789 |950 |475 | $20,606.58 | |2000...