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

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Identify the optimal order quantity using marginal analysis

Identify the optimal order quantity using marginal analysis - Microsoft Excel Tutorial

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

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Identify the optimal order quantity using marginal analysis

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- [Instructor] Earlier in this chapter, we created a worksheet that helped us identify the highest expected profit given certain levels of demand and order quantity constraints. In this movie, I will show you how to find the order quantity that yields the highest expected profit using Excel formulas. My sample file is 03_05_AnalyticsSolution, and you can find it in the chapter three folder of the Exercise Files collection. This scenario we're working with is the same as before. And we assume we're selling T-shirts at a conference and if we're not able to sell them at the conference, then they will have no value, we'll essentially have to throw them away or give them away for free. The information that we're given is that based on past experience, an average demand of 1800 shirts with a standard deviation of 600, it costs us $7.50 to have a shirt made and we sell them for 20. So the first question is what will it cost us…

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