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Total Inventory Cost Calculator

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✖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 [Demand]			+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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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*(Demand/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*(Demand/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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Break-Even Point

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Total Inventory Cost Formula

LaTeX 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)
TIC = C_h*(Q/2)+Cf*(Demand/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 (Demand) 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*(Demand/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 (Demand). 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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