Inventory And EOQ Flashcards
1
Q
Costs to take into account of inventory management:
A
- Ordering Costs (Co)
- Holding Costs (Ch)
- Stock shortage costs
- Purchase costs (bulk discounts)
2
Q
What is the Economic Order Quantity =
A
This is the optimum quantity to order, that minimises the annual holding and order costs.
3
Q
Annual orderin cost =
A
Number of orders per annum x
Cost per order
4
Q
Annual holding cost =
A
Average stock x
Annual holding cost per unit
