MMAC Flashcards for Formulas

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Revision for ordering Inventory
Denise Johnson
Flashcards by Denise Johnson, updated more than 1 year ago
Denise Johnson
Created by Denise Johnson over 3 years ago
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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
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