Annual Total Inventory Costs
Asked Jun 22, 2012, 05:10 PM
I am trying to calculate the Annual Total Inventory Costs and not sure if I don't have all the appropriate information.
Annual demand is 1000 units per year and demand is constant
Each Unit is 200$
Inventory Costs are 20%
And Cost per order is 100$
The question wants Total Annual Inventory Cost, Im not sure if that's the same thing as Total Annual Costs.
Logic would tell me that the total annual costs 240,000. Calculating the formula TC = DC + [D/Q]*S + [Q/2]H = I get TC = DC + [D/Q]*S + [Q/2]H = $205,400
Incredibly confused what its truly asking and what numbers need to be included in the computation.