Costs involved in Inventory Models

Table of Contents

Costs involved in Inventory Models

Basic EOQ Model

Inventory Levels

Symbols in EOQ models

Total Cost vs. Order Quantity.

Annual setup cost: equation

Annual holding cost: equation.

Annual holding cost: equation.

Finding where they are equal.

Solve for Q

Solve for Q

Solve for Q

Holding costs

Holding costs

Holding costs

Total holding costs

Other factors (lurking in the shadows)

Other factors (lurking in the shadows)

Total Cost of the System

Determine reorder point

MS Excel example

Preview of Thurs.: 2 other models (ind. D)

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