Formula

Question 1

Formula for
Inventory Reorder Point

Answer 1

Inventory reorder point=Avg daily Use X Lead Time

Question 2

Formula for
Reorder Quantity

Answer 2

Re-order Quantity=Avg Daily use X Turnover Goal (in days
Avg inventory on hand= (beginning Inventory $ + Ending Inventory $) / $2

Question 3

Formula for
Inventory Turnover Ratio

Answer 3

Inventory Turn Over Ratio=Total drug and medical supply purchase over specified time frame/ avg inventory on hand for that specified time frame

Question 4

Formula for
Average Shelf Life of inventory in days

Answer 4

Avg Inventory shelf life days= 365 / Inventory Turnover Ratio

Question 5

Formula for
Breakeven Point

Answer 5

Breakeven point=# of times service needs to occur to breakeven=(price of equipment including support and maintenance) / (client invoiced cost - cost to actually produce the service)