1. Total Cost
Total Cost = Buying Cost + Carrying Cost + Ordering Cost
Total Cost = Buying Cost + Carrying Cost + Ordering Cost
2. Economic Order (Reorder) Quantity
3. Consumption during Lead Time
Normal Consumption × Normal Lead Time
Normal Consumption × Normal Lead Time
4. Reorder Level (ROL)
Maximum Consumption × Maximum Lead Time
Maximum Consumption × Maximum Lead Time
or
Minimum Level + Consumption during Lead Time
or
Safety Stock + Consumption during Lead Time
5. Consumption during Lead Time
Average Consumption × Average Lead Time
Average Consumption × Average Lead Time
6. Maximum Level
ROL + ROQ − (Min. Consumption × Min. Lead Time)
ROL + ROQ − (Min. Consumption × Min. Lead Time)
or
EOQ or ROQ + Safety Stock
7. Minimum Level
ROL − (Normal Consumption × Normal Lead Time)
ROL − (Normal Consumption × Normal Lead Time)
8. Danger Level
Normal Consumption × Max. Lead Time for Emergency Purchases
Normal Consumption × Max. Lead Time for Emergency Purchases
or
Min. Consumption × Emergency Delivery Time
9. Average Stock Level
$$ \frac{Maximum\ Level + Minimum\ Level}{2} $$
$$ \frac{Maximum\ Level + Minimum\ Level}{2} $$
or
$$ Minimum\ Level + \frac{1}{2} \times EOQ $$
12. Inventory Turnover Ratio
$$ \frac{Raw\ Material\ Consumed}{Average\ Stock} $$
$$ \frac{Raw\ Material\ Consumed}{Average\ Stock} $$
13. Inventory Turnover Period
$$ \frac{365}{Inventory\ Turnover\ Ratio} $$
$$ \frac{365}{Inventory\ Turnover\ Ratio} $$
16. Total Carrying Cost
$$ Carrying\ Cost\ Per\ Unit \times \frac{EOQ}{2} $$
$$ Carrying\ Cost\ Per\ Unit \times \frac{EOQ}{2} $$
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