Total Inventory cost is the total cost associated with ordering and carrying inventory, not including the actual cost of the inventory itself. It is important for companies to understand what factors influence the total cost they pay, so as to be able to minimize it.

Calculator of Total Inventory Cost

Cost per Unit per Year (C) =
Fixed Cost per Order (F) =
Units Demand per Year (D) =
Order Quantity (Q) =
 
Total Inventory Cost (TIC) =

Online financial calculator helps to calculate the total inventory cost, i.e. cost required for carrying and ordering goods.

Formula of Total Inventory Cost

TIC = C (Q/2) + F (D/Q)

where,

  • C=Carrying cost per unit per year
  • Q=Quantity of each order
  • F=Fixed cost per order
  • D=Demand in units per year

 

0 comments

  • Hello, guest