Formulas

Formulas to memorize

Annual Usage in Units

EOQ = (2(a)(order cost) / unit price x carrying cost))^1/2. What is a?

Order cost

EOQ = (2 (annual usage in units) (b) / unit price x carrying cost))^1/2. What is b?

Unit price

EOQ = (2 (annual usage in units) (order cost) / c x carrying cost))^1/2. What is c?

Carrying cost

EOQ = (2 (annual usage in units) (order cost) / unit price x d))^1/2. What is d?

Number of line items requested and not filled

NIS = a / Total Line Items Requested. What is a?

Total line items requested

NIS = Number of Line Items Requested and NOT Filled / b. What is b?

Number of Line Items Requested and Filled

Fill Rate = a / Total Line Items Requested. What is a?

Total line items requested

Fill Rate = Number of Line Items Requested and Filled / b. What is b?

Number of Line Items Ordered and on Backorder

Backorder rate = a / Total Line Items Requested. What is a?

Total Line Items Requested

Backorder rate = Number of Line Items Ordered and on Backorder / b. What is b?

Total Annual Issues

Inventory turns = a - Returns / Average Inventory Value. What is a?

Returns

Inventory turns = (Total Annual Issues - b) / Average Inventory Value. What is b?

Average Inventory Value

Inventory turns = (Total Annual Issues - Returns) / c. What is c?

Cost of Goods Sold

Inventory turns = (a) / Ending Inventory Value. What is a?

Ending Inventory Value

Inventory turns = (Cost of Goods Sold) / b. What is b?

+

Liabilities _ Owner’s Equity / Fund Balances = Assets

-

Assets _ Liabilities = Owner’s Equity / Fund Balances

-

Assets _ Owner’s Equity / Fund Balances = Liabilities

Revenues collected

Income statement = (a) - (Operating expenses). What is a?

Operating expenses

Income statement = (Revenues collected) - (b). What is b?

Fixed cost

BEP = (a) / (Price - Variable cost). What is a?

Price

BEP = Fixed cost / (b - Variable cost). What is b?

Variable cost

BEP = Fixed cost / (Price - c). What is c?

Minimum Supply Level

Safety Stock + Lead-time = c. What is c?

Safety Stock

a + Lead-time = Minimum Supply Level. What is a?

Lead-time

Safety Stock + b = Minimum Supply Level. What is b?

Maximum Supply Level

Minimum Level + Order Quantity = c. What is c?

Minimum Level

a + Order Quantity = Maximum Supply Level. What is a?

Order Quantity

Minimum Level + b = Maximum Supply Level. What is b?