Inventory policy costs Total cost=O + +C× 2
Inventory Policy Costs + = 2 Q C Q S Total cost O
Total Inventory costs TC=(p×S)+0x3+Cx
Total Inventory Costs ( ) + = + 2 Q C Q S TC p S O
Example 1 DATA O=S30 S=1000 units p.a. p=$20 per unit C=$3 per unit p a. Required: Calculate the eoQ and inventory policy costs associated with ordering in the EOQ
Example 1 O = $30 S = 1 000 units p.a. p = $20 per unit C = $3 per unit p.a. Required: Calculate the EOQ and inventory policy costs associated with ordering in the EOQ. DATA
Example 1 Solution EOo2×SxO 2×30×1000 3 =141.42or142unts
Example 1 Solution =141.42 or 142 units 3 2 30 1000 = C 2 S O EOQ =
Total costs=O× 1000 142 $30× +$3× 142 =$211.27+$21300 $424.27
= $424.27 = $211.27 + $213.00 2 142 + $3 142 1000 = $30 2 Q + C Q S Total costs = O