To calculate the total inventory-related cost per year, you need to add the total annual ordering costs and annual carrying costs. However, without specific numbers or a formula, I can't provide a numerical answer. Here's how you would generally do it:

1. Calculate the Annual Ordering Costs: This is typically done by dividing the total annual demand by the order quantity (also known as the lot size), and then multiplying that by the cost per order.

Annual Ordering Cost = (Annual Demand / Order Quantity) * Cost per Order

2. Calculate the Annual Carrying Costs: This is usually calculated by multiplying the average inventory by the carrying cost per unit per year. The average inventory is often approximated as half the order quantity.

Annual Carrying Cost = (Order Quantity / 2) * Carrying Cost per Unit per Year

3. Add the two together:

Total Inventory-Related Cost = Annual Ordering Cost + Annual Carrying Cost

Remember, this is a simplification. Actual inventory costs can include other factors like shortage costs, costs of lost sales, and so on.

Question

To calculate the total inventory-related cost per year, you need to add the total annual ordering costs and annual carrying costs. However, without specific numbers or a formula, I can't provide a numerical answer. Here's how you would generally do it:

1. Calculate the Annual Ordering Costs: This is typically done by dividing the total annual demand by the order quantity (also known as the lot size), and then multiplying that by the cost per order.

Annual Ordering Cost = (Annual Demand / Order Quantity) * Cost per Order

2. Calculate the Annual Carrying Costs: This is usually calculated by multiplying the average inventory by the carrying cost per unit per year. The average inventory is often approximated as half the order quantity.

Annual Carrying Cost = (Order Quantity / 2) * Carrying Cost per Unit per Year

3. Add the two together:

Total Inventory-Related Cost = Annual Ordering Cost + Annual Carrying Cost

Remember, this is a simplification. Actual inventory costs can include other factors like shortage costs, costs of lost sales, and so on.

Knowee AI · Accepted Answer

To calculate the total inventory-related cost per year, you need to add the total annual ordering costs and annual carrying costs. However, without specific numbers or a formula, I can't provide a numerical answer. Here's how you would generally do it:

1. Calculate the Annual Ordering Costs: This is typically done by dividing the total annual demand by the order quantity (also known as the lot size), and then multiplying that by the cost per order.

Annual Ordering Cost = (Annual Demand / Order Quantity) * Cost per Order

2. Calculate the Annual Carrying Costs: This is usually calculated by multiplying the average inventory by the carrying cost per unit per year. The average inventory is often approximated as half the order quantity.

Annual Carrying Cost = (Order Quantity / 2) * Carrying Cost per Unit per Year

3. Add the two together:

Total Inventory-Related Cost = Annual Ordering Cost + Annual Carrying Cost

Remember, this is a simplification. Actual inventory costs can include other factors like shortage costs, costs of lost sales, and so on.

What is the total inventory-related cost per year? (Note: you need to compute the totalannual ordering costs and annual carrying costs)

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