Chapter 3 accounting for materials Flashcards
1
Q
total annual holding cost
A
holding cost per unit (Ch) x average inventory (Q/2)
2
Q
total annual ordering cost
A
cost of placing an order (Co) x number of orders (D/Q)
3
Q
total annual cost
A
PD + (Co x D/Q) + (Ch x Q/2)
4
Q
Reorder level
A
max usage x max lead time
5
Q
EOQ
A
√2CoD ÷ Ch
6
Q
EQB
A
√2Cod ÷ Ch(1-D/R)
7
Q
min inventory level
A
re-order level - (average usage x average lead time)
8
Q
max inventory level
A
re-order level + reorder quantity - (min usage x min lead time)
9
Q
cumulative weighted aver price
A
total costs before issue ÷ total no. of units before issue
10
Q
free stock
A
stock on hand + stock on order - stock that has scheduled for use
