11-02-2018, 11:58 PM

From the Working with your Business Consultant Professional Calculator series, Manufacturing Consultant booklet, Economic Ordering Quantity;

formula

EQN=SQRT(2×FIXCO×SALES÷MAIN(CARY%÷100×PRICE))

where

FIXCO = fixed cost of placing and receiving an order

SALES = annual unit sales

CARY% = carrying cost as a percentage of inventory value

PRICE = purchase price per unit of inventroy

"The economic ordering quantity is the optimum quantity to order each

time an order is placed. It is based on the cost of placing and receiving

an order, annual sales, carrying costs (including warehousing costs,

interest on funds tied up in inventroy, insurance and obsolescence)

and the purchase price of the goods.

The equation above is useful assuming that usage is at a constant rate

and that delivery lead times are constant."

SlideRule

formula

EQN=SQRT(2×FIXCO×SALES÷MAIN(CARY%÷100×PRICE))

where

FIXCO = fixed cost of placing and receiving an order

SALES = annual unit sales

CARY% = carrying cost as a percentage of inventory value

PRICE = purchase price per unit of inventroy

"The economic ordering quantity is the optimum quantity to order each

time an order is placed. It is based on the cost of placing and receiving

an order, annual sales, carrying costs (including warehousing costs,

interest on funds tied up in inventroy, insurance and obsolescence)

and the purchase price of the goods.

The equation above is useful assuming that usage is at a constant rate

and that delivery lead times are constant."

SlideRule