1. When reviewing the ACFE’s Code of Ethics, what specific code(s) did Arthur Andersen violate? Often fraud examiners must deal with independence issues when examining a company and its situation. How do we define independence in this scenario?
2. Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 65 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 8. Ms. Flynn would like to maintain a 90% service level. Refer to standard normal table for z-values.
a) What safety stock level do you recommend for BX-5?
b) What is the appropriate reorder point?