Inventory Cost Graph
This figure graphs the Holding Cost and Ordering Cost per year equations. The third line is the addition of these two equations, which generates the Total Inventory Cost per year. This graph should give you a better understanding of the derivation of the optimal ordering quantity equation, i.e., the EPQ equation.
-
EPQ Graph
Read more about this topic: Economic Production Quantity
Famous quotes containing the words cost and/or graph:
“I knew that the wall was the main thing in Quebec, and had cost a great deal of money.... In fact, these are the only remarkable walls we have in North America, though we have a good deal of Virginia fence, it is true.”
—Henry David Thoreau (1817–1862)
“When producers want to know what the public wants, they graph it as curves. When they want to tell the public what to get, they say it in curves.”
—Marshall McLuhan (1911–1980)