1. Total Cost
Total Cost = Buying Cost + Carrying Cost + Ordering Cost
Total Cost = Buying Cost + Carrying Cost + Ordering Cost
2. Economic Order Quantity (EOQ)
$$ EOQ = \sqrt{\frac{2AO}{C}} $$
$$ EOQ = \sqrt{\frac{2AO}{C}} $$
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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