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Lecture notes Economics IA

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Lecture notes of 6 pages for the course Economics IA at Unisa (free)










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Uploaded on
January 29, 2026
Number of pages
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Written in
2025/2026
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Class notes
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TRL3708
ASSIGNMENT 3




MAY 9, 2024
62392646

, Question 1


1.1: In South Africa, public and private hospitals must weigh the costs associated
with inventory management and transportation. When it comes to transportation,
hospitals

must strike a compromise between the requirement for prompt and secure delivery
of goods and the cost of employing various forms of transportation (such as trucks,
vans, or specialized medical transport). For the transportation of fragile or
temperature-sensitive medical products, for instance, employing specialized medical
transport may be more costly yet required. On the other hand, employing standard
vehicles might be less expensive, but it might lead to longer delivery delays and
possibly harmed supplies.
Healthcare facilities need to weigh the expenses of stockouts against the cost of
having surplus inventory.
Financial resources are committed to carrying excess inventory, which also
increases the risk of waste should supplies run out before needed. Stockouts,
however, have the potential to affect patient care and interfere with medical services.
For instance, the case study notes that there could be a problem with inventory
management if certain hospitals in South Africa have low percentage drug fill rates.
Because of potential issues with the country's transportation network and the
availability of specific medical supplies in isolated or underdeveloped locations,
trade-offs relating to inventory and transportation are especially important in South
Africa. Additionally, because public hospitals may face greater financial limits and
resource limitations, the cost trade-offs between them and private hospitals may
differ.


1.2 Theory: By altering the quantity of warehouses in their supply chain, South
African state hospitals may have raised the quality of care provided to patients
during the COVID-19 pandemic.
This is consistent with the idea of flexible supply chains, which enable the of supply
chain architecture and procedures in reaction to alterations in circumstances or
unplanned events.
Public hospitals in South Africa may have changed the number of warehouses to
ensure effective distribution and availability of necessary commodities in response to
the increased demand for medical supplies and equipment during the COVID-19
epidemic.


Hospitals could reduce the time and expense of delivering items to various hospital
departments or healthcare institutions in the area by decentralizing their storage and
distribution operations by building more temporary warehouses in key areas.
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