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