Calculates the order quantity that minimizes the total holding costs and ordering costs.

Formula: sqrt(2*fcd*fck/(cpu*ccp/100))

Q: The optimal order quantity

D: The annual demand quantity

K: The fixed cost per order, setup cost

P: The purchase unit price, unit production cost

cc%: The carrying cost percentage

For and annual requirement quantity (D) = 10000 units, cost per order (K) = $2, cost per unit (P)= $8 and a carrying cost percentage of 2%

Value | Key | Display | Description |
---|---|---|---|

2 | cc% | 2.00 | Stores the carrying cost percentage%. |

8 | P | 8.00 | Stores the purchase unit price. |

2 | K | 2.00 | Stores the fixed cost per order. |

EE4 | D | 10,000.00 | Stores the annual demand quantity |

Q | 500.00 | Calculates the optimal order quantity |

Reference: Economic order quantity - Wikipedia