EOQ and ROP

EOQ and ReOrder Point

This template can be used to calculate different values

for an EOQ model. It can also be used for models involving
stochastic demand patterns.

INPUT:

Annual Demand: D/year D 21900

Cost per Unit C
Inventory charge (% of unit cost) i
Holding cost: H (if not given,H = i*C) H $0.50
Ordering Cost S $10.00
Length of year: N(months,weeks,days) N 365
demand per (month,week,day) d 60
Std. Deviation/(month,week,day) σd 7
Lead TimeL L(months,weeks,days)) L 6
Lead-time Standard Deviation: σL 17.15
Service Level P 95%
Safety Stock(if given) SS 0

OUTPUT:

Optimal Order Quantity (Qopt) = 935

Annual Inventory Holding Cost = $233.75
Annual Ordering Cost = $234.22
Annual Unit Cost =
Total Cost = $467.97
Safety Factor - z: (use E(z) & table below) = 1.64
E(z) = 0.092
Cycle Time - T(in days) = 15.58
Number of Orders per year = 23
Safety Stock = 28.1201422
Reorder Point, R = 388

Expected Number Out of Stock versus Standard Deviation

(Normalized to a Standard Deviation of 1)
SL z E(z)

Page 1
EOQ and ROP

0.0000 -4.50 4.5000

0.0000 -4.49 4.4900
0.0000 -4.48 4.4800
0.0000 -4.47 4.4700
0.0000 -4.46 4.4600
0.0000 -4.45 4.4500
0.0000 -4.44 4.4400
0.0000 -4.43 4.4300
0.0000 -4.42 4.4200
0.0000 -4.41 4.4100
0.0000 -4.40 4.4000
0.0000 -4.39 4.3900
0.0000 -4.38 4.3800
0.0000 -4.37 4.3700
0.0000 -4.36 4.3600
0.0000 -4.35 4.3500
0.0000 -4.34 4.3400
0.0000 -4.33 4.3300
0.0000 -4.32 4.3200
0.0000 -4.31 4.3100
0.0000 -4.30 4.3000
0.0000 -4.29 4.2900
0.0000 -4.28 4.2800
0.0000 -4.27 4.2700
0.0000 -4.26 4.2600
0.0000 -4.25 4.2500
0.0000 -4.24 4.2400
0.0000 -4.23 4.2300
0.0000 -4.22 4.2200
0.0000 -4.21 4.2100
0.0000 -4.20 4.2000
0.0000 -4.19 4.1900
0.0000 -4.18 4.1800
0.0000 -4.17 4.1700
0.0000 -4.16 4.1600
0.0000 -4.15 4.1500
0.0000 -4.14 4.1400
0.0000 -4.13 4.1300
0.0000 -4.12 4.1200
0.0000 -4.11 4.1100
0.0000 -4.10 4.1000
0.0000 -4.09 4.0900
0.0000 -4.08 4.0800
0.0000 -4.07 4.0700
0.0000 -4.06 4.0600
0.0000 -4.05 4.0500
0.0000 -4.04 4.0400
0.0000 -4.03 4.0300
0.0000 -4.02 4.0200
0.0000 -4.01 4.0100

Page 2
EOQ and ROP

0.0000 -4.00 4.0000

0.0000 -3.99 3.9900
0.0000 -3.98 3.9800
0.0000 -3.97 3.9700
0.0000 -3.96 3.9600
0.0000 -3.95 3.9500
0.0000 -3.94 3.9400
0.0000 -3.93 3.9300
0.0000 -3.92 3.9200
0.0000 -3.91 3.9100
0.0000 -3.90 3.9000
0.0001 -3.89 3.8900
0.0001 -3.88 3.8800
0.0001 -3.87 3.8700
0.0001 -3.86 3.8600
0.0001 -3.85 3.8500
0.0001 -3.84 3.8400
0.0001 -3.83 3.8300
0.0001 -3.82 3.8200
0.0001 -3.81 3.8100
0.0001 -3.80 3.8000
0.0001 -3.79 3.7900
0.0001 -3.78 3.7800
0.0001 -3.77 3.7700
0.0001 -3.76 3.7600
0.0001 -3.75 3.7500
0.0001 -3.74 3.7400
0.0001 -3.73 3.7300
0.0001 -3.72 3.7200
0.0001 -3.71 3.7100
0.0001 -3.70 3.7000
0.0001 -3.69 3.6900
0.0001 -3.68 3.6800
0.0001 -3.67 3.6700
0.0001 -3.66 3.6600
0.0001 -3.65 3.6500
0.0001 -3.64 3.6400
0.0001 -3.63 3.6300
0.0001 -3.62 3.6200
0.0002 -3.61 3.6100
0.0002 -3.60 3.6000
0.0002 -3.59 3.5900
0.0002 -3.58 3.5800
0.0002 -3.57 3.5700
0.0002 -3.56 3.5600
0.0002 -3.55 3.5500
0.0002 -3.54 3.5400
0.0002 -3.53 3.5301
0.0002 -3.52 3.5201
0.0002 -3.51 3.5101

Page 3
EOQ and ROP

0.0002 -3.50 3.5001

0.0002 -3.49 3.4901
0.0003 -3.48 3.4801
0.0003 -3.47 3.4701
0.0003 -3.46 3.4601
0.0003 -3.45 3.4501
0.0003 -3.44 3.4401
0.0003 -3.43 3.4301
0.0003 -3.42 3.4201
0.0003 -3.41 3.4101
0.0003 -3.40 3.4001
0.0003 -3.39 3.3901
0.0004 -3.38 3.3801
0.0004 -3.37 3.3701
0.0004 -3.36 3.3601
0.0004 -3.35 3.3501
0.0004 -3.34 3.3401
0.0004 -3.33 3.3301
0.0005 -3.32 3.3201
0.0005 -3.31 3.3101
0.0005 -3.30 3.3001
0.0005 -3.29 3.2901
0.0005 -3.28 3.2801
0.0005 -3.27 3.2701
0.0006 -3.26 3.2601
0.0006 -3.25 3.2502
0.0006 -3.24 3.2402
0.0006 -3.23 3.2302
0.0006 -3.22 3.2202
0.0007 -3.21 3.2102
0.0007 -3.20 3.2002
0.0007 -3.19 3.1902
0.0007 -3.18 3.1802
0.0008 -3.17 3.1702
0.0008 -3.16 3.1602
0.0008 -3.15 3.1502
0.0008 -3.14 3.1402
0.0009 -3.13 3.1302
0.0009 -3.12 3.1202
0.0009 -3.11 3.1103
0.0010 -3.10 3.1003
0.0010 -3.09 3.0903
0.0010 -3.08 3.0803
0.0011 -3.07 3.0703
0.0011 -3.06 3.0603
0.0011 -3.05 3.0503
0.0012 -3.04 3.0403
0.0012 -3.03 3.0303
0.0013 -3.02 3.0204
0.0013 -3.01 3.0104

Page 4
EOQ and ROP

0.0013 -3.00 3.0004

0.0014 -2.99 2.9904
0.0014 -2.98 2.9804
0.0015 -2.97 2.9704
0.0015 -2.96 2.9604
0.0016 -2.95 2.9505
0.0016 -2.94 2.9405
0.0017 -2.93 2.9305
0.0018 -2.92 2.9205
0.0018 -2.91 2.9105
0.0019 -2.90 2.9005
0.0019 -2.89 2.8906
0.0020 -2.88 2.8806
0.0021 -2.87 2.8706
0.0021 -2.86 2.8606
0.0022 -2.85 2.8506
0.0023 -2.84 2.8407
0.0023 -2.83 2.8307
0.0024 -2.82 2.8207
0.0025 -2.81 2.8107
0.0026 -2.80 2.8008
0.0026 -2.79 2.7908
0.0027 -2.78 2.7808
0.0028 -2.77 2.7708
0.0029 -2.76 2.7609
0.0030 -2.75 2.7509
0.0031 -2.74 2.7409
0.0032 -2.73 2.7310
0.0033 -2.72 2.7210
0.0034 -2.71 2.7110
0.0035 -2.70 2.7011
0.0036 -2.69 2.6911
0.0037 -2.68 2.6811
0.0038 -2.67 2.6712
0.0039 -2.66 2.6612
0.0040 -2.65 2.6512
0.0041 -2.64 2.6413
0.0043 -2.63 2.6313
0.0044 -2.62 2.6214
0.0045 -2.61 2.6114
0.0047 -2.60 2.6015
0.0048 -2.59 2.5915
0.0049 -2.58 2.5816
0.0051 -2.57 2.5716
0.0052 -2.56 2.5617
0.0054 -2.55 2.5517
0.0055 -2.54 2.5418
0.0057 -2.53 2.5318
0.0059 -2.52 2.5219
0.0060 -2.51 2.5119

Page 5
EOQ and ROP

0.0062 -2.50 2.5020

0.0064 -2.49 2.4921
0.0066 -2.48 2.4821
0.0068 -2.47 2.4722
0.0069 -2.46 2.4623
0.0071 -2.45 2.4523
0.0073 -2.44 2.4424
0.0075 -2.43 2.4325
0.0078 -2.42 2.4226
0.0080 -2.41 2.4126
0.0082 -2.40 2.4027
0.0084 -2.39 2.3928
0.0087 -2.38 2.3829
0.0089 -2.37 2.3730
0.0091 -2.36 2.3631
0.0094 -2.35 2.3532
0.0096 -2.34 2.3433
0.0099 -2.33 2.3334
0.0102 -2.32 2.3235
0.0104 -2.31 2.3136
0.0107 -2.30 2.3037
0.0110 -2.29 2.2938
0.0113 -2.28 2.2839
0.0116 -2.27 2.2740
0.0119 -2.26 2.2641
0.0122 -2.25 2.2542
0.0125 -2.24 2.2444
0.0129 -2.23 2.2345
0.0132 -2.22 2.2246
0.0136 -2.21 2.2147
0.0139 -2.20 2.2049
0.0143 -2.19 2.1950
0.0146 -2.18 2.1852
0.0150 -2.17 2.1753
0.0154 -2.16 2.1655
0.0158 -2.15 2.1556
0.0162 -2.14 2.1458
0.0166 -2.13 2.1360
0.0170 -2.12 2.1261
0.0174 -2.11 2.1163
0.0179 -2.10 2.1065
0.0183 -2.09 2.0966
0.0188 -2.08 2.0868
0.0192 -2.07 2.0770
0.0197 -2.06 2.0672
0.0202 -2.05 2.0574
0.0207 -2.04 2.0476
0.0212 -2.03 2.0378
0.0217 -2.02 2.0280
0.0222 -2.01 2.0183

Page 6
EOQ and ROP

0.0228 -2.00 2.0085

0.0233 -1.99 1.9987
0.0239 -1.98 1.9890
0.0244 -1.97 1.9792
0.0250 -1.96 1.9694
0.0256 -1.95 1.9597
0.0262 -1.94 1.9500
0.0268 -1.93 1.9402
0.0274 -1.92 1.9305
0.0281 -1.91 1.9208
0.0287 -1.90 1.9111
0.0294 -1.89 1.9013
0.0301 -1.88 1.8916
0.0307 -1.87 1.8819
0.0314 -1.86 1.8723
0.0322 -1.85 1.8626
0.0329 -1.84 1.8529
0.0336 -1.83 1.8432
0.0344 -1.82 1.8336
0.0351 -1.81 1.8239
0.0359 -1.80 1.8143
0.0367 -1.79 1.8046
0.0375 -1.78 1.7950
0.0384 -1.77 1.7854
0.0392 -1.76 1.7758
0.0401 -1.75 1.7662
0.0409 -1.74 1.7566
0.0418 -1.73 1.7470
0.0427 -1.72 1.7374
0.0436 -1.71 1.7278
0.0446 -1.70 1.7183
0.0455 -1.69 1.7087
0.0465 -1.68 1.6992
0.0475 -1.67 1.6897
0.0485 -1.66 1.6801
0.0495 -1.65 1.6706
0.0505 -1.64 1.6611
0.0516 -1.63 1.6516
0.0526 -1.62 1.6422
0.0537 -1.61 1.6327
0.0548 -1.60 1.6232
0.0559 -1.59 1.6138
0.0571 -1.58 1.6044
0.0582 -1.57 1.5949
0.0594 -1.56 1.5855
0.0606 -1.55 1.5761
0.0618 -1.54 1.5667
0.0630 -1.53 1.5574
0.0643 -1.52 1.5480
0.0655 -1.51 1.5386

Page 7
EOQ and ROP

0.0668 -1.50 1.5293

0.0681 -1.49 1.5200
0.0694 -1.48 1.5107
0.0708 -1.47 1.5014
0.0721 -1.46 1.4921
0.0735 -1.45 1.4828
0.0749 -1.44 1.4736
0.0764 -1.43 1.4643
0.0778 -1.42 1.4551
0.0793 -1.41 1.4459
0.0808 -1.40 1.4367
0.0823 -1.39 1.4275
0.0838 -1.38 1.4183
0.0853 -1.37 1.4092
0.0869 -1.36 1.4000
0.0885 -1.35 1.3909
0.0901 -1.34 1.3818
0.0918 -1.33 1.3727
0.0934 -1.32 1.3636
0.0951 -1.31 1.3546
0.0968 -1.30 1.3455
0.0985 -1.29 1.3365
0.1003 -1.28 1.3275
0.1020 -1.27 1.3185
0.1038 -1.26 1.3095
0.1056 -1.25 1.3006
0.1075 -1.24 1.2917
0.1093 -1.23 1.2827
0.1112 -1.22 1.2738
0.1131 -1.21 1.2650
0.1151 -1.20 1.2561
0.1170 -1.19 1.2473
0.1190 -1.18 1.2384
0.1210 -1.17 1.2296
0.1230 -1.16 1.2209
0.1251 -1.15 1.2121
0.1271 -1.14 1.2034
0.1292 -1.13 1.1946
0.1314 -1.12 1.1859
0.1335 -1.11 1.1773
0.1357 -1.10 1.1686
0.1379 -1.09 1.1600
0.1401 -1.08 1.1514
0.1423 -1.07 1.1428
0.1446 -1.06 1.1342
0.1469 -1.05 1.1257
0.1492 -1.04 1.1172
0.1515 -1.03 1.1087
0.1539 -1.02 1.1002
0.1562 -1.01 1.0917

Page 8
EOQ and ROP

0.1587 -1.00 1.0833

0.1611 -0.99 1.0749
0.1635 -0.98 1.0665
0.1660 -0.97 1.0582
0.1685 -0.96 1.0499
0.1711 -0.95 1.0416
0.1736 -0.94 1.0333
0.1762 -0.93 1.0250
0.1788 -0.92 1.0168
0.1814 -0.91 1.0086
0.1841 -0.90 1.0004
0.1867 -0.89 0.9923
0.1894 -0.88 0.9842
0.1922 -0.87 0.9761
0.1949 -0.86 0.9680
0.1977 -0.85 0.9600
0.2005 -0.84 0.9520
0.2033 -0.83 0.9440
0.2061 -0.82 0.9360
0.2090 -0.81 0.9281
0.2119 -0.80 0.9202
0.2148 -0.79 0.9123
0.2177 -0.78 0.9045
0.2206 -0.77 0.8967
0.2236 -0.76 0.8889
0.2266 -0.75 0.8812
0.2296 -0.74 0.8734
0.2327 -0.73 0.8658
0.2358 -0.72 0.8581
0.2389 -0.71 0.8505
0.2420 -0.70 0.8429
0.2451 -0.69 0.8353
0.2483 -0.68 0.8278
0.2514 -0.67 0.8203
0.2546 -0.66 0.8128
0.2578 -0.65 0.8054
0.2611 -0.64 0.7980
0.2643 -0.63 0.7906
0.2676 -0.62 0.7833
0.2709 -0.61 0.7759
0.2743 -0.60 0.7687
0.2776 -0.59 0.7614
0.2810 -0.58 0.7542
0.2843 -0.57 0.7471
0.2877 -0.56 0.7399
0.2912 -0.55 0.7328
0.2946 -0.54 0.7257
0.2981 -0.53 0.7187
0.3015 -0.52 0.7117
0.3050 -0.51 0.7047

Page 9
EOQ and ROP

0.3085 -0.50 0.6978

0.3121 -0.49 0.6909
0.3156 -0.48 0.6840
0.3192 -0.47 0.6772
0.3228 -0.46 0.6704
0.3264 -0.45 0.6637
0.3300 -0.44 0.6569
0.3336 -0.43 0.6503
0.3372 -0.42 0.6436
0.3409 -0.41 0.6370
0.3446 -0.40 0.6304
0.3483 -0.39 0.6239
0.3520 -0.38 0.6174
0.3557 -0.37 0.6109
0.3594 -0.36 0.6045
0.3632 -0.35 0.5981
0.3669 -0.34 0.5918
0.3707 -0.33 0.5855
0.3745 -0.32 0.5792
0.3783 -0.31 0.5730
0.3821 -0.30 0.5668
0.3859 -0.29 0.5606
0.3897 -0.28 0.5545
0.3936 -0.27 0.5484
0.3974 -0.26 0.5424
0.4013 -0.25 0.5363
0.4052 -0.24 0.5304
0.4090 -0.23 0.5244
0.4129 -0.22 0.5186
0.4168 -0.21 0.5127
0.4207 -0.20 0.5069
0.4247 -0.19 0.5011
0.4286 -0.18 0.4954
0.4325 -0.17 0.4897
0.4364 -0.16 0.4840
0.4404 -0.15 0.4784
0.4443 -0.14 0.4728
0.4483 -0.13 0.4673
0.4522 -0.12 0.4618
0.4562 -0.11 0.4564
0.4602 -0.10 0.4509
0.4641 -0.09 0.4456
0.4681 -0.08 0.4402
0.4721 -0.07 0.4349
0.4761 -0.06 0.4297
0.4801 -0.05 0.4244
0.4840 -0.04 0.4193
0.4880 -0.03 0.4141
0.4920 -0.02 0.4090
0.4960 -0.01 0.4040

Page 10
EOQ and ROP

0.5000 0.00 0.3989

0.5040 0.01 0.3940
0.5080 0.02 0.3890
0.5120 0.03 0.3841
0.5160 0.04 0.3793
0.5199 0.05 0.3744
0.5239 0.06 0.3697
0.5279 0.07 0.3649
0.5319 0.08 0.3602
0.5359 0.09 0.3556
0.5398 0.10 0.3509
0.5438 0.11 0.3464
0.5478 0.12 0.3418
0.5517 0.13 0.3373
0.5557 0.14 0.3328
0.5596 0.15 0.3284
0.5636 0.16 0.3240
0.5675 0.17 0.3197
0.5714 0.18 0.3154
0.5753 0.19 0.3111
0.5793 0.20 0.3069
0.5832 0.21 0.3027
0.5871 0.22 0.2986
0.5910 0.23 0.2944
0.5948 0.24 0.2904
0.5987 0.25 0.2863
0.6026 0.26 0.2824
0.6064 0.27 0.2784
0.6103 0.28 0.2745
0.6141 0.29 0.2706
0.6179 0.30 0.2668
0.6217 0.31 0.2630
0.6255 0.32 0.2592
0.6293 0.33 0.2555
0.6331 0.34 0.2518
0.6368 0.35 0.2481
0.6406 0.36 0.2445
0.6443 0.37 0.2409
0.6480 0.38 0.2374
0.6517 0.39 0.2339
0.6554 0.40 0.2304
0.6591 0.41 0.2270
0.6628 0.42 0.2236
0.6664 0.43 0.2203
0.6700 0.44 0.2169
0.6736 0.45 0.2137
0.6772 0.46 0.2104
0.6808 0.47 0.2072
0.6844 0.48 0.2040
0.6879 0.49 0.2009

Page 11
EOQ and ROP

0.6915 0.50 0.1978

0.6950 0.51 0.1947
0.6985 0.52 0.1917
0.7019 0.53 0.1887
0.7054 0.54 0.1857
0.7088 0.55 0.1828
0.7123 0.56 0.1799
0.7157 0.57 0.1771
0.7190 0.58 0.1742
0.7224 0.59 0.1714
0.7257 0.60 0.1687
0.7291 0.61 0.1659
0.7324 0.62 0.1633
0.7357 0.63 0.1606
0.7389 0.64 0.1580
0.7422 0.65 0.1554
0.7454 0.66 0.1528
0.7486 0.67 0.1503
0.7517 0.68 0.1478
0.7549 0.69 0.1453
0.7580 0.70 0.1429
0.7611 0.71 0.1405
0.7642 0.72 0.1381
0.7673 0.73 0.1358
0.7704 0.74 0.1334
0.7734 0.75 0.1312
0.7764 0.76 0.1289
0.7794 0.77 0.1267
0.7823 0.78 0.1245
0.7852 0.79 0.1223
0.7881 0.80 0.1202
0.7910 0.81 0.1181
0.7939 0.82 0.1160
0.7967 0.83 0.1140
0.7995 0.84 0.1120
0.8023 0.85 0.1100
0.8051 0.86 0.1080
0.8078 0.87 0.1061
0.8106 0.88 0.1042
0.8133 0.89 0.1023
0.8159 0.90 0.1004
0.8186 0.91 0.0986
0.8212 0.92 0.0968
0.8238 0.93 0.0950
0.8264 0.94 0.0933
0.8289 0.95 0.0916
0.8315 0.96 0.0899
0.8340 0.97 0.0882
0.8365 0.98 0.0865
0.8389 0.99 0.0849

Page 12
EOQ and ROP

0.8413 1.00 0.0833

0.8438 1.01 0.0817
0.8461 1.02 0.0802
0.8485 1.03 0.0787
0.8508 1.04 0.0772
0.8531 1.05 0.0757
0.8554 1.06 0.0742
0.8577 1.07 0.0728
0.8599 1.08 0.0714
0.8621 1.09 0.0700
0.8643 1.10 0.0686
0.8665 1.11 0.0673
0.8686 1.12 0.0659
0.8708 1.13 0.0646
0.8729 1.14 0.0634
0.8749 1.15 0.0621
0.8770 1.16 0.0609
0.8790 1.17 0.0596
0.8810 1.18 0.0584
0.8830 1.19 0.0573
0.8849 1.20 0.0561
0.8869 1.21 0.0550
0.8888 1.22 0.0538
0.8907 1.23 0.0527
0.8925 1.24 0.0517
0.8944 1.25 0.0506
0.8962 1.26 0.0495
0.8980 1.27 0.0485
0.8997 1.28 0.0475
0.9015 1.29 0.0465
0.9032 1.30 0.0455
0.9049 1.31 0.0446
0.9066 1.32 0.0436
0.9082 1.33 0.0427
0.9099 1.34 0.0418
0.9115 1.35 0.0409
0.9131 1.36 0.0400
0.9147 1.37 0.0392
0.9162 1.38 0.0383
0.9177 1.39 0.0375
0.9192 1.40 0.0367
0.9207 1.41 0.0359
0.9222 1.42 0.0351
0.9236 1.43 0.0343
0.9251 1.44 0.0336
0.9265 1.45 0.0328
0.9279 1.46 0.0321
0.9292 1.47 0.0314
0.9306 1.48 0.0307
0.9319 1.49 0.0300

Page 13
EOQ and ROP

0.9332 1.50 0.0293

0.9345 1.51 0.0286
0.9357 1.52 0.0280
0.9370 1.53 0.0274
0.9382 1.54 0.0267
0.9394 1.55 0.0261
0.9406 1.56 0.0255
0.9418 1.57 0.0249
0.9429 1.58 0.0244
0.9441 1.59 0.0238
0.9452 1.60 0.0232
0.9463 1.61 0.0227
0.9474 1.62 0.0222
0.9484 1.63 0.0216
0.9495 1.64 0.0211
0.9505 1.65 0.0206
0.9515 1.66 0.0201
0.9525 1.67 0.0197
0.9535 1.68 0.0192
0.9545 1.69 0.0187
0.9554 1.70 0.0183
0.9564 1.71 0.0178
0.9573 1.72 0.0174
0.9582 1.73 0.0170
0.9591 1.74 0.0166
0.9599 1.75 0.0162
0.9608 1.76 0.0158
0.9616 1.77 0.0154
0.9625 1.78 0.0150
0.9633 1.79 0.0146
0.9641 1.80 0.0143
0.9649 1.81 0.0139
0.9656 1.82 0.0136
0.9664 1.83 0.0132
0.9671 1.84 0.0129
0.9678 1.85 0.0126
0.9686 1.86 0.0123
0.9693 1.87 0.0119
0.9699 1.88 0.0116
0.9706 1.89 0.0113
0.9713 1.90 0.0111
0.9719 1.91 0.0108
0.9726 1.92 0.0105
0.9732 1.93 0.0102
0.9738 1.94 0.0100
0.9744 1.95 0.0097
0.9750 1.96 0.0094
0.9756 1.97 0.0092
0.9761 1.98 0.0090
0.9767 1.99 0.0087

Page 14
EOQ and ROP

0.9772 2.00 0.0085

0.9778 2.01 0.0083
0.9783 2.02 0.0080
0.9788 2.03 0.0078
0.9793 2.04 0.0076
0.9798 2.05 0.0074
0.9803 2.06 0.0072
0.9808 2.07 0.0070
0.9812 2.08 0.0068
0.9817 2.09 0.0066
0.9821 2.10 0.0065
0.9826 2.11 0.0063
0.9830 2.12 0.0061
0.9834 2.13 0.0060
0.9838 2.14 0.0058
0.9842 2.15 0.0056
0.9846 2.16 0.0055
0.9850 2.17 0.0053
0.9854 2.18 0.0052
0.9857 2.19 0.0050
0.9861 2.20 0.0049
0.9864 2.21 0.0047
0.9868 2.22 0.0046
0.9871 2.23 0.0045
0.9875 2.24 0.0044
0.9878 2.25 0.0042
0.9881 2.26 0.0041
0.9884 2.27 0.0040
0.9887 2.28 0.0039
0.9890 2.29 0.0038
0.9893 2.30 0.0037
0.9896 2.31 0.0036
0.9898 2.32 0.0035
0.9901 2.33 0.0034
0.9904 2.34 0.0033
0.9906 2.35 0.0032
0.9909 2.36 0.0031
0.9911 2.37 0.0030
0.9913 2.38 0.0029
0.9916 2.39 0.0028
0.9918 2.40 0.0027
0.9920 2.41 0.0026
0.9922 2.42 0.0026
0.9925 2.43 0.0025
0.9927 2.44 0.0024
0.9929 2.45 0.0023
0.9931 2.46 0.0023
0.9932 2.47 0.0022
0.9934 2.48 0.0021
0.9936 2.49 0.0021

Page 15
EOQ and ROP

0.9938 2.50 0.0020

0.9940 2.51 0.0019
0.9941 2.52 0.0019
0.9943 2.53 0.0018
0.9945 2.54 0.0018
0.9946 2.55 0.0017
0.9948 2.56 0.0017
0.9949 2.57 0.0016
0.9951 2.58 0.0016
0.9952 2.59 0.0015
0.9953 2.60 0.0015
0.9955 2.61 0.0014
0.9956 2.62 0.0014
0.9957 2.63 0.0013
0.9959 2.64 0.0013
0.9960 2.65 0.0012
0.9961 2.66 0.0012
0.9962 2.67 0.0012
0.9963 2.68 0.0011
0.9964 2.69 0.0011
0.9965 2.70 0.0011
0.9966 2.71 0.0010
0.9967 2.72 0.0010
0.9968 2.73 0.0010
0.9969 2.74 0.0009
0.9970 2.75 0.0009
0.9971 2.76 0.0009
0.9972 2.77 0.0008
0.9973 2.78 0.0008
0.9974 2.79 0.0008
0.9974 2.80 0.0008
0.9975 2.81 0.0007
0.9976 2.82 0.0007
0.9977 2.83 0.0007
0.9977 2.84 0.0007
0.9978 2.85 0.0006
0.9979 2.86 0.0006
0.9979 2.87 0.0006
0.9980 2.88 0.0006
0.9981 2.89 0.0006
0.9981 2.90 0.0005
0.9982 2.91 0.0005
0.9982 2.92 0.0005
0.9983 2.93 0.0005
0.9984 2.94 0.0005
0.9984 2.95 0.0005
0.9985 2.96 0.0004
0.9985 2.97 0.0004
0.9986 2.98 0.0004
0.9986 2.99 0.0004

Page 16
EOQ and ROP

0.9987 3.00 0.0004

0.9987 3.01 0.0004
0.9987 3.02 0.0004
0.9988 3.03 0.0003
0.9988 3.04 0.0003
0.9989 3.05 0.0003
0.9989 3.06 0.0003
0.9989 3.07 0.0003
0.9990 3.08 0.0003
0.9990 3.09 0.0003
0.9990 3.10 0.0003
0.9991 3.11 0.0003
0.9991 3.12 0.0002
0.9991 3.13 0.0002
0.9992 3.14 0.0002
0.9992 3.15 0.0002
0.9992 3.16 0.0002
0.9992 3.17 0.0002
0.9993 3.18 0.0002
0.9993 3.19 0.0002
0.9993 3.20 0.0002
0.9993 3.21 0.0002
0.9994 3.22 0.0002
0.9994 3.23 0.0002
0.9994 3.24 0.0002
0.9994 3.25 0.0002
0.9994 3.26 0.0001
0.9995 3.27 0.0001
0.9995 3.28 0.0001
0.9995 3.29 0.0001
0.9995 3.30 0.0001
0.9995 3.31 0.0001
0.9995 3.32 0.0001
0.9996 3.33 0.0001
0.9996 3.34 0.0001
0.9996 3.35 0.0001
0.9996 3.36 0.0001
0.9996 3.37 0.0001
0.9996 3.38 0.0001
0.9997 3.39 0.0001
0.9997 3.40 0.0001
0.9997 3.41 0.0001
0.9997 3.42 0.0001
0.9997 3.43 0.0001
0.9997 3.44 0.0001
0.9997 3.45 0.0001
0.9997 3.46 0.0001
0.9997 3.47 0.0001
0.9997 3.48 0.0001
0.9998 3.49 0.0001

Page 17
EOQ and ROP

0.9998 3.50 0.0001

0.9998 3.51 0.0001
0.9998 3.52 0.0001
0.9998 3.53 0.0001
0.9998 3.54 0.0000
0.9998 3.55 0.0000
0.9998 3.56 0.0000
0.9998 3.57 0.0000
0.9998 3.58 0.0000
0.9998 3.59 0.0000
0.9998 3.60 0.0000
0.9998 3.61 0.0000
0.9999 3.62 0.0000
0.9999 3.63 0.0000
0.9999 3.64 0.0000
0.9999 3.65 0.0000
0.9999 3.66 0.0000
0.9999 3.67 0.0000
0.9999 3.68 0.0000
0.9999 3.69 0.0000
0.9999 3.70 0.0000
0.9999 3.71 0.0000
0.9999 3.72 0.0000
0.9999 3.73 0.0000
0.9999 3.74 0.0000
0.9999 3.75 0.0000
0.9999 3.76 0.0000
0.9999 3.77 0.0000
0.9999 3.78 0.0000
0.9999 3.79 0.0000
0.9999 3.80 0.0000
0.9999 3.81 0.0000
0.9999 3.82 0.0000
0.9999 3.83 0.0000
0.9999 3.84 0.0000
0.9999 3.85 0.0000
0.9999 3.86 0.0000
0.9999 3.87 0.0000
0.9999 3.88 0.0000
0.9999 3.89 0.0000
1.0000 3.90 0.0000
1.0000 3.91 0.0000
1.0000 3.92 0.0000
1.0000 3.93 0.0000
1.0000 3.94 0.0000
1.0000 3.95 0.0000
1.0000 3.96 0.0000
1.0000 3.97 0.0000
1.0000 3.98 0.0000
1.0000 3.99 0.0000

Page 18
EOQ and ROP

1.0000 4.00 0.0000

1.0000 4.01 0.0000
1.0000 4.02 0.0000
1.0000 4.03 0.0000
1.0000 4.04 0.0000
1.0000 4.05 0.0000
1.0000 4.06 0.0000
1.0000 4.07 0.0000
1.0000 4.08 0.0000
1.0000 4.09 0.0000
1.0000 4.10 0.0000
1.0000 4.11 0.0000
1.0000 4.12 0.0000
1.0000 4.13 0.0000
1.0000 4.14 0.0000
1.0000 4.15 0.0000
1.0000 4.16 0.0000
1.0000 4.17 0.0000
1.0000 4.18 0.0000
1.0000 4.19 0.0000
1.0000 4.20 0.0000
1.0000 4.21 0.0000
1.0000 4.22 0.0000
1.0000 4.23 0.0000
1.0000 4.24 0.0000
1.0000 4.25 0.0000
1.0000 4.26 0.0000
1.0000 4.27 0.0000
1.0000 4.28 0.0000
1.0000 4.29 0.0000
1.0000 4.30 0.0000
1.0000 4.31 0.0000
1.0000 4.32 0.0000
1.0000 4.33 0.0000
1.0000 4.34 0.0000
1.0000 4.35 0.0000
1.0000 4.36 0.0000
1.0000 4.37 0.0000
1.0000 4.38 0.0000
1.0000 4.39 0.0000
1.0000 4.40 0.0000
1.0000 4.41 0.0000
1.0000 4.42 0.0000
1.0000 4.43 0.0000
1.0000 4.44 0.0000
1.0000 4.45 0.0000
1.0000 4.46 0.0000
1.0000 4.47 0.0000
1.0000 4.48 0.0000
1.0000 4.49 0.0000

Page 19
EOQ and ROP

1.0000 4.50 0.0000

Page 20
 EOQ and ROP

k versus Standard Deviation

eviation of 1)

Page 21
Single Period Model - Full Marginal Cost Analysis Approach

Co = $ 0.20 Cost per unit of demand overestimated

Cu = $ 0.20 Cost per unit of demand underestimated

Number of Units Purchased

Units
Probability 1800 2000 2200 2400 2600 2800
Demanded
1800 0.050 - 40 80 120 160 200
2000 0.100 40 - 40 80 120 160
2200 0.200 80 40 - 40 80 120
2400 0.300 120 80 40 - 40 80
2600 0.200 160 120 80 40 - 40
2800 0.100 200 160 120 80 40 -
3000 0.050 240 200 160 120 80 40

Total Cost 120 84 56 44 56 84

140

120

100
Expected Cost ($)

80

60

40

20

0
1800 2000 2200 2400 2600 2800 3000
Number Purchased
r of Units Purchased

3000
240
200
160
120
80
40
-

120 - - - -
Fixed Quantity Model

Annual demand (D) 1000 Q0 =

Ordering cost (S) $5.00 Average Inventory =
Holding cost per unit per year (H) $1.25

Days in operation per year = 360 Reorder point =

Lead time (L) 5 Days per cycle =
Cost per unit (C) $12.50 Number of cycles per year =
Total Annual Holding and Ordering Cost =
Total Cost =

100.0
Order
90.0Received
Usage Rate
Quantity

50.0

13.9

0.0
0 20 40 60 80 100 120 140 160 180

Time Horizon
 X ROP
0 13.9
162.0 13.9

T CumProd Q y
63 0 0 1000
63 300.0 162.0

Time InvLevel Usage CumProd

CumInv 0.0 90.0 0
CumInv 0.0 90.0 0.0 0
UseInv 0.0 90.0 90.0 0
UseInv 32.4 0.0 0
CumInv 32.4 90.0 0
CumInv 32.4 90.0 0.0 0
UseInv 32.4 90.0 90.0 0
UseInv 64.8 0.0 0
CumInv 64.8 90.0 0.0 0
CumInv 64.8 90.0 90.0 0
UseInv 64.8 90.0 0
UseInv 97.2 0.0 0
CumInv 97.2 90.0 0.0 0
CumInv 97.2 90.0 90.0 0
UseInv 97.2 90.0 0
UseInv 129.6 0.0 0
CumInv 129.6 90.0 0.0 0
CumInv 129.6 90.0 90.0 0
UseInv 129.6 90.0 0
UseInv 162.0 0.0 0
 Q0 = 90
Average Inventory = 45.0

Reorder point = 13.9

Days per cycle = 32.4
Number of cycles per year = 11.1
Total Annual Holding and Ordering Cost = $ 111.81
Total Cost = 12,611.81

Order
90.0Received
Usage Rate

13.9

100 120 140 160 180

13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
13.9
Fixed Time Period Model with Safety Stock

30 T Number of days between reviews

14 L Lead time in days
10 d-bar Forecast average daily demand (d-bar)
3 sd Standard deviation of demand
98% L Service Level
150 I Current inventory level

19.900 sT+L Standard deviation of demand over the review and lead time
2.054 z z-value for the stated service level
440 Average demand over the vulnerable period
40.87 Safety stock
330 q Order Quantity
EOQ and Total Cost Graph

Annual demand (D) 1000

Per Order cost (S) $5.00
Holding cost per unit per year (H) $1.25

Qopt = 90

Q
Total Holding Cost
600.0 Total Setup Cost
Total Cost

500.0

400.0
Cost ($)

300.0

200.0

150

100.0

0.0
0 50 100 150 200 250 300 350 400 450 500

Order Quantity
Increment Q 10

Q CumProd QBEP TC
200 0 0 90 0 150
200 150 112 90 200 150

Q THC TSC TC
0 0.0 0 0.0
10 6.3 500.0 506.3
20 12.5 250.0 262.5
30 18.8 166.7 185.4
40 25.0 125.0 150.0
50 31.3 100.0 131.3
60 37.5 83.3 120.8
70 43.8 71.4 115.2
80 50.0 62.5 112.5
90 56.3 55.6 111.8
100 62.5 50.0 112.5
110 68.8 45.5 114.2
120 75.0 41.7 116.7
130 81.3 38.5 119.7
140 87.5 35.7 123.2
150 93.8 33.3 127.1
160 100.0 31.3 131.3
170 106.3 29.4 135.7
180 112.5 27.8 140.3
190 118.8 26.3 145.1
200 125.0 25.0 150.0
210 131.3 23.8 155.1
220 137.5 22.7 160.2
230 143.8 21.7 165.5
240 150.0 20.8 170.8
250 156.3 20.0 176.3
260 162.5 19.2 181.7
270 168.8 18.5 187.3
280 175.0 17.9 192.9
290 181.3 17.2 198.5
300 187.5 16.7 204.2
310 193.8 16.1 209.9
320 200.0 15.6 215.6
330 206.3 15.2 221.4
340 212.5 14.7 227.2
350 218.8 14.3 233.0
360 225.0 13.9 238.9
370 231.3 13.5 244.8
380 237.5 13.2 250.7
390 243.8 12.8 256.6
400 250.0 12.5 262.5
410 256.3 12.2 268.4
420 262.5 11.9 274.4
430 268.8 11.6 280.4
 Q
Total Holding Cost
Total Setup Cost
Total Cost

400 450 500