Quantitive Formulas

Formulas: Solution: Q* = TCC = TOC= TIC = ROP = units Total Inventory Cost = TIC Total Order Cost = TOC Total Carry Cost = TOC Fixed Order Cost = FOC = $9.00 Annual Demand (Units) = U = 48,000 Whole Sale Purchase Price (or Unit Cost) = ) PP = $3.00 Annual Carry Cost (% of PP) = CC = 20% TOC - FOCU/Q TCC =(Q/2) CCPP Order Quantity Q TIC = TOC + TCC = (FOC * (U/q) + ((U/2) * CCPP) Cost Minimizing Q = SQRT{(FOCU* 2)/(CCPP)) = Q" note: this is derives by setting the first derivitive of TIC to 0. Reorder Point = (U/365) * Q = LT = 7 days EOQ 1 - 1 - 1 TGC Input Data 1 TIC 1 Solution 0 Annual Unit - U Purchase Price = PP Fixed Order Cost = FOC Carry Cost = CC Order Lead Time (in days) = LT 0 - 0 0 Objective: O- - Find the order quantity that minimizes the total cost of managing inventory 9 Input Clear it New Problem Calculate Fit to screen