Total Inventory Cost Calculator

✖Carrying cost per unit per year refers to the total cost of holding inventory for a unit per year.ⓘ Carrying cost per unit per year [C_h]			+10% -10%
✖The Quantity of Each Order refers to the number of units or items that are purchased or acquired in a single transaction or order.ⓘ Quantity of Each Order [Q]			+10% -10%
✖Fixed costs per order are the cost that does not change with an increase or decrease in the amount of goods or services produced or sold.ⓘ Fixed cost per order [Cf]			+10% -10%
✖Demand in units per year represents the total demands of the unit per year.ⓘ Demand in units per year [D]			+10% -10%

✖Total inventory cost is the total cost associated with ordering and carrying inventory, not including the actual cost of the inventory itself.ⓘ Total Inventory Cost [TIC]

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Formula

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Total Inventory Cost

Formula

`"TIC" = "C"_{"h"}*("Q"/2)+"Cf"*("D"/"Q")`

Example

`"20087.5"="3.5"*("50"/2)+"500"*("2000"/"50")`

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Total Inventory Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order)
TIC = C_h*(Q/2)+Cf*(D/Q)
This formula uses 5 Variables

Variables Used

Total Inventory Cost - Total inventory cost is the total cost associated with ordering and carrying inventory, not including the actual cost of the inventory itself.
Carrying cost per unit per year - Carrying cost per unit per year refers to the total cost of holding inventory for a unit per year.
Quantity of Each Order - The Quantity of Each Order refers to the number of units or items that are purchased or acquired in a single transaction or order.
Fixed cost per order - Fixed costs per order are the cost that does not change with an increase or decrease in the amount of goods or services produced or sold.
Demand in units per year - Demand in units per year represents the total demands of the unit per year.

STEP 1: Convert Input(s) to Base Unit

Carrying cost per unit per year: 3.5 --> No Conversion Required
Quantity of Each Order: 50 --> No Conversion Required
Fixed cost per order: 500 --> No Conversion Required
Demand in units per year: 2000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

TIC = C_h*(Q/2)+Cf*(D/Q) --> 3.5*(50/2)+500*(2000/50)

Evaluating ... ...

TIC = 20087.5

STEP 3: Convert Result to Output's Unit

20087.5 --> No Conversion Required

FINAL ANSWER

20087.5 <-- Total Inventory Cost

(Calculation completed in 00.004 seconds)

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Created by Team Softusvista

Softusvista Office (Pune), India

Team Softusvista has created this Calculator and 600+ more calculators!

Verified by Himanshi Sharma

Bhilai Institute of Technology (BIT), Raipur

Himanshi Sharma has verified this Calculator and 800+ more calculators!

< 22 Business Calculators

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Go Macaulay Duration = sum(x,1,5,Cash Flow Number,((Cash Flow/(1+Yield to Maturity (YTM)/Compounding Periods))^Cash Flow Number))*(Time in Years/Present Value)

Weighted Average Cost of Capital

Go Weighted average cost of capital = ((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market Value of the Firm’s Debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate))

Total Inventory Cost

Go Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order)

Acid Test Ratio

Go Acid Test Ratio = (Cash+Accounts Receivable+Short Term Investments)/Current Liabilities

Economic Order Quantity

Go Economic Order Quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2)

Return on Capital Employed

Go Return on capital employed = (Earnings Before Interest and Taxes/(Total Assets-Current Liabilities))*100

Diluted Earnings per Share

Go Diluted Earnings per Share = Net Income/(Average Shares+Other Convertible Securities)

Inventory Shrinkage

Go Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100

Modified Duration

Go Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods)

Target Inventory Investment

Go Target Inventory Investment = Projected Annual Cost of Goods Sold from Stock Sales/Target Inventory Turnover

Retention Ratio

Go Retention Ratio = (Net Income-Dividend)/Net Income

Contribution Margin per Unit

Go Contribution Margin per Unit = Sales Price per Unit-Variable Cost per Unit

Operating Expense Ratio

Go Operating Expense Ratio = (Operating Expense/Gross Operating Income)*100

Break-Even Point

Go Break Even Point = Fixed Costs/Contribution Margin per Unit

Estimated Earnings

Go Estimated Earnings = Forecasted Sales-Forecasted Expense

Debt Coverage Ratio

Go Debt Coverage Ratio = Net Operating Income/Debt Service

Dividends Per Share

Go Dividends Per Share = Total Dividends/Number of Shares

Solvency Ratio

Go Solvency Ratio = (Shareholders Fund*100)/Total Assets

Estimate at completion

Go Estimate at Completion = Actual Cost+Bottom up ETC

Percentage off

Go Percentage Off = 1-(Selling Price/Original Price)

Preferred Stock

Go Preferred Stock = Dividend/Discount Percentage

Days in Inventory

Go Days in Inventory = 365/Inventory Turnover

Total Inventory Cost Formula

Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order)
TIC = C_h*(Q/2)+Cf*(D/Q)

How to Calculate Total Inventory Cost?

Total Inventory Cost calculator uses Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order) to calculate the Total Inventory Cost, Total inventory cost is the total cost associated with ordering and carrying inventory, not including the actual cost of the inventory itself. Total Inventory Cost is denoted by TIC symbol.

How to calculate Total Inventory Cost using this online calculator? To use this online calculator for Total Inventory Cost, enter Carrying cost per unit per year (C_h), Quantity of Each Order (Q), Fixed cost per order (Cf) & Demand in units per year (D) and hit the calculate button. Here is how the Total Inventory Cost calculation can be explained with given input values -> 20087.5 = 3.5*(50/2)+500*(2000/50).

FAQ

What is Total Inventory Cost?

Total inventory cost is the total cost associated with ordering and carrying inventory, not including the actual cost of the inventory itself and is represented as TIC = C_h*(Q/2)+Cf*(D/Q) or Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order). Carrying cost per unit per year refers to the total cost of holding inventory for a unit per year, The Quantity of Each Order refers to the number of units or items that are purchased or acquired in a single transaction or order, Fixed costs per order are the cost that does not change with an increase or decrease in the amount of goods or services produced or sold & Demand in units per year represents the total demands of the unit per year.

How to calculate Total Inventory Cost?

Total inventory cost is the total cost associated with ordering and carrying inventory, not including the actual cost of the inventory itself is calculated using Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order). To calculate Total Inventory Cost, you need Carrying cost per unit per year (C_h), Quantity of Each Order (Q), Fixed cost per order (Cf) & Demand in units per year (D). With our tool, you need to enter the respective value for Carrying cost per unit per year, Quantity of Each Order, Fixed cost per order & Demand in units per year and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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