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Category > Business & Finance Posted 19 May 2017 My Price 8.00

Fulton National Hospital

Fulton National Hospital is reviewing ways of cutting the cost of stocking medical supplies. Two new stockless systems are being considered, to lower the hospital’s holding and handling costs. The hospital’s industrial engineer has compiled the relevant financial data for each system as follows (dollar values are in millions):

 CurrentPractice Just-in-TimeSystem StocklessSupplySystem Start-up cost$0$2.5$5Annual stock holding cost$3$1.4$0.2Annual operating cost$2$1.5$1.2System life8 years8 years8 years

The system life of eight years represents the period that the contract with the medical suppliers is in force. If the hospital’s MARR is 10%, which system is more economical?

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Status NEW Posted 19 May 2017 04:05 AM My Price 8.00

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