MMAC Flashcards for Formulas

Question	Answer
Chapter 3 Inventory Re-order Level	Max usage × Max lead time + Buffer inventory (if given)
Minimum Order Quantity	Minimum inventory level = Reorder level – (Average usage × Average lead time)
Maximum inventory level	Maximum inventory level = Reorder level + Reorder Quantity – (Min usage × Min lead time)
Average inventory	Minimum inventory + ½ Reorder quantity
economic order quantity (EOQ	EOQ= 2CoD CH D = annual demand in units Co = fixed cost per order CH = cost of holding one unit for one year
Chapter 10 Short Term Decision Making Breakeven point	Fixed Costs / Contribution per unit
Margin of safety (units)	budgeted sales in units - breakeven sales in units
Margin of safety %	budgeted sales units - breakeven sales units / budgeted sales units x 100
Margin of Safety revenue	margin of safety units x Selling price per unit
Target profit sales volume	Fixed costs + required profit / contribution per unit
Target profit sales value	Fixed Costs + required profit / contribution per unit x sales price per unit
profit volume ratio	contribution per unit / selling price per unit

Resource summary

	Created by Denise Johnson over 3 years ago