Virtually all inventory control systems are automated. Not surprisingly, there is a lot of software for the routine calculations. Figure shows the printout from a computer program that has done some basic calculations. How can managers use such information? What features would you expect to see in commercial inventory management software? Do a survey to compare availablepackages.

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+++ECONOMIC ORDER QUANTITY+++ EOQ Input Data Demand per year (D) Order or setup cost per order (Co) Holding cost per unit per year (Ch) Shortage cost per unit per year (Cs) Shortage cost per unit, independ Replenishment or production rate per year (P)- Lead time for a new order in year (LT) Unit cost (C) 400 £650 E20 £1,000 £100 500 0.25 120 ent of time ( EOQ Output: EOQ Maximum inventory Maximum backorder- Order interval Reorder point -360.56 72.11 0.00 0.90 year Ordering cost Holding cost Shortage cost 100.00 721.11 721.11 0.00 Subtotal of inventory cost per year Material cost per year Total cost per year 1,442.22 - £48,000.00 - £49,442.22