From the course: Excel: Business Process Analysis

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Calculate production order quantities

Calculate production order quantities

From the course: Excel: Business Process Analysis

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Calculate production order quantities

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- [Instructor] So far in this chapter, we have taken on the role of a retailer that orders goods from suppliers. In this movie, I'll assume that we're a manufacturer with our own production facility. Given a certain level of demand and other information, what quantity of products should we ask our production facility to make every day? I'll start in PowerPoint and then switch over to making the calculations in Excel. Production EOQ is the quantity of production that minimizes the total of manufacturing and storage costs. You need to know several bits of information to make this calculation. Some that you'll recognize from the regular EOQ, some will be new. The first is your annual demand. Certainly a reasonable thing to estimate. You also need to know your setup costs. Although, in this case, instead of being costs to place an order, these would be costs to start your production run. So for example, the time it would take to initiate manufacturing. You also need to know your holding…

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