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Exam 4 Flashcards - =(Max daily usage – Avg daily usage...

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Ordering Cost = # of orders per year * Cost of placing an order Carrying Cost = Avg. # of units in Inv. * Cost of carrying one unit Avg. # of units in Inv. = Units in Order / 2 EOQ = √[2 * CO * (D/CC)] Reorder Point = Daily Usage * Lead Time Safety Stock
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Unformatted text preview: = (Max daily usage – Avg. daily usage) * Lead Time Avg. OA = (Beg. Assets + End. Assets) / 2 ROI = Margin * Turnover = [OI/Sales] * [Sales/Avg. OA] = OI/Avg. OA Residual Income = OI – (Min. rate of return * Avg. OA)...
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