Key Equation

(6.1) Average Inventory Level =

(6.2) The Economic Order Quantity :

𝑄∗ =
(6.3) Total Inventory Cost :
𝑇𝐶 = 𝐶𝑜 + 𝐶ℎ
(6.4) Average dollar level =
(6.5) The Economic Order Quantity using the Carrying Cost , I, as
percentage of price P

𝑄∗ = , 𝐶ℎ = 𝐼𝑃
(6.6) The Reorder point, where d is the daily demand and L is the
lead time in days
𝑅𝑂𝑃 = 𝑑 × 𝐿
(6.10) Order Quantity when inventory is received over time

𝑄∗ =

(6.11) Optimal Production Quantity

𝑄∗ =

(6.12) Total Inventory cost with Quantity Discount

𝑇𝐶 = 𝐷𝐶 + 𝐶𝑜 + 𝐶ℎ
(6.13) Reorder Point with Savety Stock
𝑅𝑂𝑃 = 𝑑 × 𝐿 + 𝑆𝑆
(6.14) Savety Stock using the normal curve
𝑆𝑆 = 𝑍𝜎