EOQ

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September 3, 2017 at 12:12 pm #405154
fredymaila
Participant
- Topics: 48
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Which formulae for average inventory is right ?
They give different values.
=(minimum level +maximum level) /2
Or
=minimum level +EOQ/2
EOQ=6500
max level =10820
Min level =1750
September 3, 2017 at 2:14 pm #405177
John Moffat
Keymaster
- Topics: 57
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The first one, and so the answer is 6,285
(If there was constant demand over the lead time, and a fixed reorder level, then both would give the same result. Here this is obviously not the case.)
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