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15
Obsolete Inventory
Reduction with Modified
Carrying Cost Ratio
15.1 INTRODUCTION
This chapter considers a medical supplies and pharmaceutical inventory management problem faced
by a city health and human services department and shows how inefcient warehousing can become
if inventory is not periodically checked for obsolescence. The department purchases and distributes
medical supplies used by service centers spread throughout the city. To support the service process,
the department operates several warehouses in the city. Furthermore, the warehouses order large
quantities of goods at a negotiated price and store the items until a service ...