- The EOQ of an Item is determined based on the calculated EOQs of all Appearances belonging to the Item.
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- To calculate the EOQ of an Item/Appearance the following
- consumption figures are needed:
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- - The number of Months in which Take Off took place
- - The Take Off
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- Based on these data the average Take Off (X) can be calculated
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- Average Take Off = (Take Off / number of Months) * 12
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- During calculation the Costs per Batch (Y) and the Stock Costs per Unit per Year (Z) will have been included.
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- Calculating the EOQ (of an Item/Appearance) is done as follows:
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- ¹ (( 0.64 * X * Y ) / Z )
-
-
- Example : Average Take Off Item/Appearance 600 Kg
- Costs per Batch 40 Guilders
- Stock Costs per Year 1 Guilder
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- EOQ = ¹ (( 0.64 * 600 * 40 ) / 1)
- EOQ = 124 (rounded off)
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-
- The EOQ of an Item is the root of the sum of the
- quardrated EOQs of the Appearance Forms belonging to the Item (see Example below).
-
- Attention:
-
- If the Cost per Batch have been registered 0.00, 1.00 is used in the Calculation. The same goes for the Stock Cost per year. It is noted that this is necessary as the EOQ would otherwise become 0 which is "nonsense" as (f.e.) "No Stock Cost" surely does not mean that the EOQ is to be 0. Rather the other way around would be the case: if the Cost per Batch and the Stock Cost per year are 0, the EOQ may be indefinitly big. This too is "nonsense".
- Therefore the 0.00 Amounts are eliminated from the Formula in this way.
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-
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- Suppose Appearance Form 'A' has an EOQ of 124 and Appearance Form 'B' an EOQ of 101 then the EOQ of the Item will be:
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- ¹ ( 124² + 101² ) = ¹ ( 15376 + 10201 )
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- Attention : The EOQ of a Non Stock Item will not be used to determine the EOQ of the Item.
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- Nb.: Latter algorithm concerns the standard way of working within Profit, things can be adjusted custom made.
- CategoryKeywords, CategoryLogistics
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