The importance of
inventory management cannot be overemphasized in organizations. The aim of this
work is to determine the optimum inventory policies for drug storage limitation
at University Health Centre Stores and to determine the Economic Order Quantity
(EOQ) that will minimize the total cost of drugs and total space requirement
for each drug in University Health Centre Stores. This paper demonstrates the
usefulness of inventory control to help balance the merits of having inventory
control and the cost of carrying them so as determine the optimum order
quantity and to minimize the total cost. From the analysis, the University
Health Centre Stores should order 1.548485 carton of ACT Forte tablet when ?
equal to 1, order 1.5430577 when ? equal to 10, order 1.49174896 when ? equal
to 100, order 1.31307923 when ? equal to 500 , order 1.15993036 when ? equal to
1000 , order 0.78449235 when ? equal to 3700. And continuously using the
optimal EOQ for the remaining set of drugs and assuming values of the Lagrange
multiplier with the aim to minimize the total average variable cost of unit
drugs.
Keywords: Economic Order Quantity, Health Centre, Inventory, Langrange Multiplier, Multi-item
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