EOQ Form

R (Setup cost) (ODERING COST) 100 Ordering cost/yr = ord

Demand 2000 per year Holding cost/y
Holding cost (carrying cost per unit) 5 EOQ (Q*) = s
yearly inventory cost = o
Q* Optimal order quantity 282.8427124746 ROP = (Demand per year/ number o
Round up 283 Item cost = demand
Average Inventory level 141.5 EOQ+Quantity Dis
Cost

Annual ordering cost 706.71

Annual Holding cost 707.5
Yearly inventory cost 1414.21
Demand/Q*
Number of orders/yr 7.0671378092
Round up 8

ReOrder Point 0.7692307692

Round up 1

Lead Time(week) 0.02

 Formula
Ordering cost/yr = order cost x (total sales/Q)
Holding cost/yr = cost x (Q/2)
EOQ (Q*) = sqrt(2xDxR)/H
yearly inventory cost = order cost + holding cost
OP = (Demand per year/ number of working days per year) x lead time
Item cost = demand * Unit purchase cost
EOQ+Quantity Discount (Total cost = OC + HC + Item cost)
 EOQ holding cost % 5%
R (Setup cost) 100
Demand 2500 Optimal Optimal
Holding cost $1.25 $1.25 $1.20 $1.20

Q* Optimal order q 632.46 632.46 645.50 645.50

Round up 633 100 646 500

Annual ordering cost 394.94 2500.00 387.00 500.00

Annual Holding cost $395.63 $62.50 $387.60 $300.00
Yearly inventory cost 790.57 2562.50 774.60 800.00

Number of orders/yr 3.95 25.00 3.87 5.00

Round up 4 25 4 5
Total $63,290.57 $65,062.50 $60,774.60 $60,800.00
 Optimal
$1.15 $1.15 Order Quantity (Q) Unit Purchase Price
less 100 $25.00
659.38 659.38 101 to 500 $24.00
660.00 501 more 500 $23.00

378.79 499.00
$379.50 $288.08 Item cost 1 $62,500.00
758.29 787.08 Item cost 2 $60,000.00
Item cost 3 $57,500.00
3.79 4.99
4 5
$58,258.29 $58,287.08
Week Sales Data (packs)

26 274
5 275
36 275
27 276
1 277
2 277
15 277
37 277
11 278
16 279
51 279
13 280
17 280
33 280
38 280
43 280
52 280
18 281
30 281
19 282
20 282
32 282
12 283
3 284
25 284
31 284
48 284
9 285
49 285
4 286
10 286
22 286
28 286
39 286
21 287
44 287
7 288
23 288
45 288
8 289
46 289
50 289
24 290
29 290
 35 290
40 290
47 290
14 291
41 291
6 292
34 292
42 292
Standard Deviation 5.1785612123
Total Demand 14764
Ws-3
Relative
Demand Frequency
Frequency
274 1 0.019
275 2 0.038
276 1 0.019
277 4 0.077
278 1 0.019
279 2 0.038
280 6 0.115
281 2 0.038
282 3 0.058
283 0.019*52 = 1 0.019
284 4 0.077
285 2 0.038
286 5 0.096
287 2 0.038
288 3 0.058
289 3 0.058
290 5 0.096
291 2 0.038
292 3 0.058
Total 52 1.00

Ws-4
Fixed ordering cost (R ) $140.00
Holding Cost (H) $10.00
Lead-time (L) 2
No: of operating (weeks) 52
Total Demand (D) 14764
EOQ (sqrt(2DR/H)) 643

Ws-5
Demand per week (Mean) 284
Lead-Time (L) 2
Reorder Point 568

Ws-6
Service level 95%
Safety Factor (service level 95%) 1.644853627
Lead-time (L) 2
Standard Deviation over the cycle period 5.1785612123
Standard deviation of the demand during lead time 2.3261743074
Safety Stock (SS) 13 12.046236041

ws-7
Reordering point 568
Safety Stock 13
Reordering point with SS 581

Ws- 9,10
Backorder Cost (B) $30.00
Holding Cost (H) $10.00
Ordering Cost (R ) $140.00
EOQ for Backorder Cost $643.00
Optimal order Quantity (Q*) 743
Optimal backorder Quantity (K*) 186
Total Demand (D) 14764
Annual total cost (allow backorder) $5,568.16
Total cost (doesn't allow backorder) $6,626.91
Economic Order Quantity

Demand per week

Reorder Point without SS

Safety factor
Standard deviation of the demand during lead time
Safety Stock (SS)
Reorder Point with SS

Optimal Order quantity (Q*)

Optimal backorder quantity (K*)

Annual total cost (allows backorder)

Total cost (doesn't allow backorder)
SQRT(2*Total Demand*Ordering Cost/Holding Cost)

Total Demand/no: of weeks

Demand per week/Lead time

NORM.S.INV(service level%)
Safety factor * SQRT(Lead time)
Standard deviation over the cycle period *Standard deviation of the demand during lead time
(Demand per week*lead time) + Safety Stock [DL + SS]

sqrt[(2DR/H)*((H+B)/B)]
Q* [(H/(H+B)]

R * D/Q + H * (Q-K)^2/2Q + B * (K)^2/2Q

(Q*/2) * H + (D/Q*)* R + (SS * H)
Week Sales Data (packs) Frequency Relative Frequency
1 277 4 0.077
2 277 4 0.077
3 284 4 0.077
4 286 5 0.096
5 275 2 0.038
6 292 3 0.058
7 288 3 0.058
8 289 3 0.058
9 285 2 0.038
10 286 5 0.096
11 278 1 0.019
12 283 1 0.019
13 280 6 0.115
14 291 2 0.038
15 277 4 0.077
16 279 2 0.038
17 280 6 0.115
18 281 2 0.038
19 282 3 0.058
20 282 3 0.058
21 287 2 0.038
22 286 5 0.096
23 288 3 0.058
24 290 5 0.096
25 284 4 0.077
26 274 1 0.019
27 276 1 0.019
28 286 5 0.096
29 290 5 0.096
30 281 2 0.038
31 284 4 0.077
32 282 3 0.058
33 280 6 0.115
34 292 3 0.058
35 290 5 0.096
36 275 2 0.038
37 277 4 0.077
38 280 6 0.115
39 286 5 0.096
40 290 5 0.096
41 291 2 0.038
42 292 3 0.058
43 280 6 0.115
44 287 2 0.038
45 288 3 0.058
46 289 3 0.058
47 290 5 0.096
48 284 4 0.077
49 285 2 0.038
50 289 3 0.058
51 279 2 0.038
52 280 6 0.115
 Total Sales 14764 Lead Time 2 Weeks
Mean 283.92307692 Customer Svc lvl 95%
STD DEV 5.1785612123 If in year, Lead time divide 52
Safety level Z 1.644853627 wks to mth /4
Safety stock 12.046236041 13 months to yr x12

Allow Backorder Don't Allow backorder

EOQ EOQ
R (Setup cost) $140 R (Setup cost) $140
Demand 14764 Demand 14764
Holding cost $10 Holding cost $10
Backorder $30
Q* Optimal order q 642.9557
Q* Optimal order q 742.42126406 Round up 643
Round up 743 Final Q* 656
Final Q* 557
Annual ordering cost 3214.56
K* Optimal Backorder 185.75 Annual Holding cost $3,215
186 Safety stock $130
Yearly inventory cost 6559.56
Annual ordering cost 2781.91
Annual Holding cost $2,090 Number of orders/yr 22.96112
Annual Backorder Cost 696.5625 Round up 23
Yearly inventory cost 5568.16
ReOrder Pt 567.8462
Number of orders/yr 19.870794078 Round up 568
Round up 20 Final ROP 581

ReOrder Pt 567.84615385
Round up 568
Final Reorder pt 382
(s,Q) Continuous (R,S) Periodic
Demand 2000 per month Demand 900 per week
Annual Demand 24000 year Annual Demand 43200 year
R (Setup cost) 200 R (Setup cost) 90
Holding cost 8 Holding cost 12
Q* Optimal order q 1095.4451 Q* Optimal order q 402.49223595
Round up 1096 Round up 403

STD DEV 125 per month STD DEV 125 per week
Safety level Z 2.0537489 Safety level Z 2.0537489106
Safety stock 181.52747 182 Safety stock 679.21360911 680
Customer Svc lvl 98% Customer Svc lvl 98%
Lead Time 2 Weeks Lead Time 3 Weeks
Lead time/mth 4 Review Time 4 weeks

ROP 1182 (R,S) Order up to level

(s,Q) Order quantity Restock Lvl 6980
S = s+Q 2278

appropriate order quantity =target level- current inventory position

1mth /4 Weeks
One year /52 weeks

If in year, Lead time divide 52

wks to mth /4
 barode digit check digit digit position
N1 0 0 SSNN N1 N2 N3 N4 N5
N2 0 0 GTIN-8
N3 0 0 GTIN-12 N1 N2 N3
N4 0 0 GTIN-13 N1 N2 N3 N4
N5 0 0 GTIN-14 N1 N2 N3 N4 N5 N6 N7 N8 N9
N6 0 0 Multiply value of each position
N7 0 0 x3 x1 x3 x1 x3 x1 x3 x1 x3
N8 0 0 accumulated result = sum
N9 0 0 subtarct sum from nearest multiple of ten
N10 0 0
N11 1 3
N12 2 2
N13 3 9
N14 4 4
N15 5 15
N16 6 6
N17 7 21
N18 0 0

total 60

nearest - total = check digit

 digit position
N6 N7 N8 N9 N10 N11 N12 N13 N14
N1 N2 N3 N4 N5 N6 N7 N8
N4 N5 N6 N7 N8 N9 N10 N11 N12
N5 N6 N7 N8 N9 N10 N11 N12 N13
N10 N11 N12 N13 N14 N15 N16 N17 N18
tiply value of each position by
x1 x3 x1 x3 x1 x3 x1 x3
accumulated result = sum
om nearest multiple of ten = Check digit
Data for ABC analysis.

Item Annual Unit Price Annual percentage Cummulative

Number Inventory Demand percent of classification
S$ Sales $$ as of total total sales
RW106 45 250 $75.00 $18,750.00 34.67% 34.67% A
RW111 125 500 $25.00 $12,500.00 23.11% 57.78% A
RW112 130 300 $15.00 $4,500.00 8.32% 66.10% A
RW105 25 80 $50.00 $4,000.00 7.40% 73.50% B
RW103 20 90 $40.00 $3,600.00 6.66% 80.15% B
RW113 150 450 $5.00 $2,250.00 4.16% 84.31% B
RW110 125 500 $4.00 $2,000.00 3.70% 88.01% B
RW104 25 80 $12.00 $960.00 1.77% 89.78% B
RW115 250 900 $1.00 $900.00 1.66% 91.45% C
RW107 45 120 $7.50 $900.00 1.66% 93.11% C
RW101 5 18 $50.00 $900.00 1.66% 94.78% C
RW109 75 250 $3.50 $875.00 1.62% 96.39% C
RW102 17 55 $15.00 $825.00 1.53% 97.92% C
RW114 175 375 $2.00 $750.00 1.39% 99.31% C
RW108 50 250 $1.50 $375.00 0.69% 100.00% C
Total annual $54,085.00
Class A Top 70% 66.10%
Class B Next 20% 23.68%
Class C Last 10% 10.22%