Basic eoq model, Finance Basics

Assignment Help:

Basic EOQ Model

The basic inventory decision model is Economic Order Quantity or called EOQ model. This model is specified via the following equation as:

334_Basic EOQ Model 1.png

Whereas:Q is the economic order quantity

               Cn is the cost of holding inventories per unit per order

               Co is the cost of putting and obtains an order

               D is the annual demand in units

The net cost of operating the economic order quantity is specified via total ordering cost in additional total holding costs.

TC = ½QCn + ((D/Q) C0)

Whereas: Total holding cost = ½QCn

Total ordering cost = (D/Q) C0

The holding costs involve as:

  1. Storage costs
  2. Cost of tied up capital
  3. Obsolescence costs
  4. Insurance costs

The ordering costs involve as:

  1. Shipping and handling costs
  2. Cost of placing orders such as telephone and clerical costs

Related Discussions:- Basic eoq model

Financial markets-securities and financial intermediaries, Describe the str...

Describe the structure of financial systems with financial markets, securities and financial intermediaries. By a structural point of view a financial system can be considered

New divisor, Able, Baker and Charlie are the only three stocks in an index....

Able, Baker and Charlie are the only three stocks in an index. The stocks will sell for $93.$312 and $78 respectively. If Baker undergoes a 2-for-1 stock split, what is the new div

Explain the financial statement effects, Attached is the file for your bond...

Attached is the file for your bond problem. Your group must use the following for the bond problem. In addition, using the general ledger software as described in the project i

Venture Capital, In Term Sheets, what are the outcomes of Economics and Con...

In Term Sheets, what are the outcomes of Economics and Control?

Asset based valuation - example, Asset Based Valuation - Example K and...

Asset Based Valuation - Example K and K Company Limited is planning to absorb three other companies so as to realize its sales records of Sh.500, 000 per annum.  Its accountan

Future value of single or multiple cash flows, Do your experts provide Futu...

Do your experts provide Future Value of Single or Multiple Cash Flows assignment help? I need urgent help in my college assignment.

Relationship among money, Relationships and interactions among money, bond,...

Relationships and interactions among money, bond, stock and mortgage markets

Capital market authority (cma), Capital Market Authority (CMA) Was est...

Capital Market Authority (CMA) Was established in 1990 with an Act of Parliament to assist, in creation of a conducive environment, for growth and development of capital marke

Important factors for expectation theory, Important Factors for Expectation...

Important Factors for Expectation Theory The following circumstances are essential for the expectation theory to hold. i) Ideal capital markets exists where there are many

#lpp, Solve the following Linear Programming Problem using Simple method. M...

Solve the following Linear Programming Problem using Simple method. Maximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 = 4 X1 - X2 = 2 X1, X2 = 0

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd