(19B) Economic Ordering Quantity
11-02-2018, 11:58 PM (This post was last modified: 11-27-2018 01:26 PM by SlideRule.)
Post: #1
 SlideRule Senior Member Posts: 1,325 Joined: Dec 2013
(19B) Economic Ordering Quantity
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
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