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May 3, 2016 at 8:55 am
Need your kind assistance. With reference to question 2 of the test, how does the reduction in the ordering cost affect the Holding cost. Don’t we determine the holding cost from the purchase cost?
John Moffat says
May 3, 2016 at 9:03 am
The holding cost per unit is not affected, but the question asks about the total holding cost over the year.
If the order cost falls then the EOQ falls.
If the EOQ falls then the average inventory falls.
If the average inventory falls then the total holding cost over the year falls.
April 7, 2016 at 1:16 pm
I can’t find the practice questions of this video in the notes, so how do I practice them ?
April 7, 2016 at 1:22 pm
Apologies, found them now.
Thanks for the lectures.
April 7, 2016 at 2:41 pm
I am glad you found them, and thank you for the comment 🙂
March 15, 2016 at 3:20 pm
I can’t believe you put all this ON for us for free.. it is free and highly explanatory.. I am just gonna say GOD BLESS YOU Mr John
March 15, 2016 at 7:18 pm
Thank you for the comment 🙂
January 27, 2016 at 5:21 pm
Again no tasks in the Manual which is on the website.
Thanks in advance,
January 27, 2016 at 5:47 pm
So ignore it!!
The practice tests do not need a lecture because full workings appear after you have submitted your answer.
October 25, 2015 at 10:31 am
I am confused with test question number 3. I thought D is for the annual demand which is 15,000 units but in the answer it says 15,000/12= 1250 per month and using this figure in the formula.
Thank you for your help
October 25, 2015 at 10:45 am
Either use monthly demand and monthly holding cost, or yearly demand and yearly holding cost.
It makes no difference at all – it is just that the period for both has to be the same.
So certainly use the annual demand of 15,000 and the annual holding cost of $1.20 (12 x $0.10) – you will get exactly the same answer 🙂
October 25, 2015 at 10:54 am
Now it’s all clear 🙂 Thank you for the help and your lectures are brilliant!!!
October 25, 2015 at 10:57 am
Great (and thanks for the comment 🙁 )
August 23, 2015 at 8:13 pm
Ok, thank you.
August 23, 2015 at 7:14 pm
Hi mr John, I’m studying for F9 but you referred us to this video. Its been fine up till the Just-In-Time section of the F9 note, which I didn’t find in this video.
August 23, 2015 at 7:51 pm
That bit is for you to read yourself – there are no calculations involved 🙂
June 18, 2015 at 1:45 am
I couldn’t understand why holding cost will decrease with decrease in ordering cost. I mean when we will place fewer order then we’ll hold more inventory so holding cost will increase. Thanks
June 18, 2015 at 7:30 am
If there is a decrease in the ordering cost, they will place more orders (not fewer orders).
The EOQ will be smaller, therefore the average inventory will be smaller and so the holding cost per year will decrease.
If you are not convinced then try it yourself with one of the examples in the notes. Calculate the EOQ. Then do the same question with a smaller order cost and see what happens 🙂
February 25, 2015 at 1:59 pm
he is the mystery man, no offence but my image of Mr John is of a character from Game of Thrones called Varys the Master of Whisperers.
Who agrees 🙂 ?
February 25, 2015 at 3:45 pm
(If you look at my photo on the first ACCA page, I don’t think I look anything like him 🙂 )
February 25, 2015 at 4:22 pm
My bad! Never realised you had a picture on the website. I only know Mr Miike Little and Tax Tutors face. Nonetheless you all are amazing teachers , doing the greatest job. All my acca exams so far have been accomplished thanks to open tuition
October 15, 2014 at 2:13 am
Hello Sir..thankyou for your lectures.i am confused why in test 6 D=12500×4??
in test 1 also D=20000×4
whats the logic behind “4”??
October 15, 2014 at 5:00 am
We need the demand for the year but it is given for 3 months. There are 4 three month periods in a year 🙂
October 15, 2014 at 5:06 am
Oooh hahaha now i get it.thankyou sir 🙂
September 14, 2014 at 9:44 pm
Beside i cant see you..but your way of teaching is really good…I wish if I could attend a lecture of yours ..Thanks you Sir. John.
September 14, 2014 at 9:51 pm
Thank you very much 🙂
Raj Singh says
August 13, 2014 at 8:23 pm
I wish I could sit in one of your lectures. I loved the last bit of this lecture about how people write notes to the examiner, these lectures are not only informative but you do provide some humour too! Thank you Mr Moffat
July 20, 2014 at 11:05 pm
Could you please tell me the book name you are teaching from?
July 21, 2014 at 7:35 am
Our own Course Notes which you can download free of charge.
The link is immediately above the video!!
February 7, 2014 at 11:09 am
Mr John , what are the syllabus for acca F2 please.
February 7, 2014 at 11:15 am
You can find the syllabus on the ACCA website – it is much too long to type here 🙂
February 10, 2014 at 12:42 pm
thank you sir, but it said ‘ACCA Syllabus (F1-F3)
February 2013 to January
I can’t find for the year 2014. Can you send me the link please ?
February 10, 2014 at 12:57 pm
I found it Sir 😀
January 30, 2014 at 7:57 pm
1) What if Cost of ordering goes higher? what happens to cost of Holding and EOQ?
2) What if Cost of Holding goes Lower? what happens to cost of ordering and EOQ?
January 30, 2014 at 9:40 pm
Think about the formula ( or if you need the make up some numbers and try it)
If the order cost gets higher then the EOQ is higher and therefore the total holding cost is higher.
If the holding cost per unit is lower then the EOQ is higher, which means fewer orders and so the total order cost per year is lower.
February 10, 2014 at 7:06 pm
Thanks alot John!!!
September 12, 2013 at 11:32 am
Dear Mr. John Moffat,
can you please show me the way to do question 4? I got 300 units and there’s no option in the question for that.
EOQ = 2x160x9000 / 32 = 90,000 square root = 300 units.
September 12, 2013 at 2:46 pm
Ch = 8% x $40 = $3.20 (not $32) 🙂
September 12, 2013 at 4:04 pm
Ahhh, i see.. My oversight..
Thank you so much! 😀
September 12, 2013 at 4:28 pm
You are welcome 🙂
December 28, 2012 at 2:12 pm
I wish i would sit in one of his lecture^^,funny guy
August 21, 2012 at 6:26 pm
sorry, where is the lecture on labour costs? Thank you
August 22, 2012 at 9:24 am
@adejumolu, There is no lecture. It is covered in the Course Notes.
March 9, 2012 at 4:53 pm
For Question No. 3 why the demand is divided into monthly? Does this mean if the question is asking optimal reorder quantity we will present the monthly demand? Just confused though . Thanks
July 4, 2012 at 11:33 am
@ella1025, i wnt to know the samee
July 4, 2012 at 12:53 pm
@mohammadbangash, The demand (D) and the holding cost per unit (Ch) must both be for the same period.
In the answer they are both per month, but you could have put them both per year (i.e. use D as the yearly demand, and Ch as the cost per year (12 x 0.10 = 1.20). Both will give the same answer.
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