From the course: Excel Supply Chain Analysis: Solving Inventory Problems

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Calculate an economic order quantity (EOQ)

Calculate an economic order quantity (EOQ) - Microsoft Excel Tutorial

From the course: Excel Supply Chain Analysis: Solving Inventory Problems

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Calculate an economic order quantity (EOQ)

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- [Instructor] Placing an order with a supplier cost money. Even though you might think your employee's wages and shipping costs are essentially free given the value of the merchandise they have significant impact on the cost of your orders. In this movie I will show you how to calculate an economic order quantity which is the number of items that minimizes your total cost. My sample file is O one O two calculate EOQ. That's an Excel workbook that you can find in the chapter One folder of the exercise files collection. I have two worksheets in this workbook. The first has the information we need to calculate, the economic order quantity or EOQ. So you can see, we have the setup cost which is what it costs to place an order, the flow rate which is the number of units that you expect to order in a year. The wholesale costs that you pay for each item and inventory percentage. The inventory percentage is the percent of an…

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