Formulae
☑ Total Cost = Buying Cost + Carrying Cost + Ordering Cost
☑ EOQ = `\sqrt{\frac{2AO}C}`
☑ Reorder Level (ROL) =
⟶ Maximum Consumption `\times` Maximum Lead Time
⟶ Minimum Level + Consumption during Lead Time (i.e. Normal Consumption `\times` Normal Lead Time)
⟶ Safety Stock + Consumption during Lead Time (i.e. Normal Consumption `\times` Normal Lead Time)
☑ Consumption during Lead Time = Average Consumption `\times` Average Lead Time
☑ Maximum Level =
⟶ ROL + ROQ - (Min. Consumption `\times` Min. Lead Time)
⟶ EOQ/ROQ + Safety Stock
☑ Minimum Level = ROL - (Normal Consumption`\times`Normal Lead Time)
☑ Danger Level =
⟶ Normal Consumption`\times`Max. Lead Time for Emergency Purchases
⟶ Min. Consumption`\times`Emergency Delivery Time
☑ Average Stock Level =
⟶ (Maximum Level + Minimum Level) / 2
⟶ Min. Level + (1`\div`2 `\times` EOQ)
☑ Safety Stock = Annual Demand`\div`365 `\times` No. of days
☑ Reserve Inventory or Buffer Stock = (Max. daily usage - Avg. daily usage) `\times` Lead Time
☑ Inventory Turnover Ratio = Raw Material Consumed during the Period `\div` Average Stock during the Period
☑ Inventory Turnover Period = 365 `\div` Inventory Turnover Ratio
☑ Material Issue Price
⟶ Simple Average Price Method = Total of Unit price of each purchase `\div` Total No. of purchases
⟶ Weighted Average Price Method = Total Cost of materials in stock `\div` Total Quantity of Materials
☑ Average Inventory = Total Carrying Cost `\div` Carrying Cost Per Unit
☑ Total Carrying Cost = Carrying Cost Per Unit `\times` EOQ `\div` 2
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ReplyDeleteThanks for sharing useful Information. companies are less incentivized to produce goods and may cut back on production. The ratio measures the loss in output per each 1% change in inflation.
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