The following describes how you calculate the EOQ for an item not using quantity dependable prices.
Prerequisites
Assume the following apples:
| System currency = GBP |
| Stock rate = 15 % |
| Order cost = 10 GBP |
| Annual forecast = 50000 |
| Act price 1 = 200 GBP |
| Stock unit = EACH |
| Purchase unit = EACH |
- Select the Calculate EOQ menu item.
- You access EOQ calculation. Click OK to run the calculation. (Note: If Interactive process is set to YES in Work with system user profiles for your profile, you can press F2 to run the calculation interactively).
Calculation/Check value
When the system has calculated the EOQ, you can view the value in the Order quantity field in the Item file, Inventory information panel.
The formula is:
| SQRT (2 * order cost * annual forecast) / (purchase price * stock rate) |
According to the above prerequisites: SQRT (2 * 10 * 50000) / (200 * 15 %) = 182.574
The EOQ is 182.574 EACH.