- Continuous-model order quantity
- 707.1068 units
- Orders per year
- 14.1421
- Average cycle inventory
- 353.5534 units
- Annual ordering cost
- 707.1068
- Annual holding cost
- 707.1068
- Total modeled relevant cost
- 1,414.2136
The deterministic cost model holds demand, cost per order and holding cost fixed while varying order quantity.
- Total
- Ordering
- Holding
View the chart values
| Series | Order quantity (units) | Annual relevant cost |
|---|---|---|
| Total | 282.84271 | 2,050.6097 |
| Total | 388.90873 | 1,674.5574 |
| Total | 494.97475 | 1,505.1273 |
| Total | 601.04076 | 1,432.9311 |
| Total | 707.10678 | 1,414.2136 |
| Total | 813.1728 | 1,428.0483 |
| Total | 919.23882 | 1,463.1671 |
| Total | 1,025.3048 | 1,512.9647 |
| Total | 1,131.3708 | 1,573.3126 |
| Ordering | 282.84271 | 1,767.767 |
| Ordering | 388.90873 | 1,285.6487 |
| Ordering | 494.97475 | 1,010.1525 |
| Ordering | 601.04076 | 831.89033 |
| Ordering | 707.10678 | 707.10678 |
| Ordering | 813.1728 | 614.87546 |
| Ordering | 919.23882 | 543.92829 |
| Ordering | 1,025.3048 | 487.65985 |
| Ordering | 1,131.3708 | 441.94174 |
| Holding | 282.84271 | 282.84271 |
| Holding | 388.90873 | 388.90873 |
| Holding | 494.97475 | 494.97475 |
| Holding | 601.04076 | 601.04076 |
| Holding | 707.10678 | 707.10678 |
| Holding | 813.1728 | 813.1728 |
| Holding | 919.23882 | 919.23882 |
| Holding | 1,025.3048 | 1,025.3048 |
| Holding | 1,131.3708 | 1,131.3708 |
On this page
Keep time and unit conventions matched
Enter annual demand in units, fixed cost per order and holding cost per unit per year. Demand and costs are assumed constant in this model.
Read the relevant-cost objective
The curve combines annual ordering and cycle-inventory holding cost. Constant purchase costs, safety stock, shortages and supplier discounts are omitted.
Inspect the fictional default
Demand 10,000, order cost 50 and unit holding cost 2 give quantity 707.1068. Annual ordering and holding costs are equal at this continuous optimum.
Evaluate feasible and uncertain conditions separately
A fractional quantity is not necessarily a feasible order. Pack sizes, minimum quantities, uncertain demand, lead time and storage constraints can require a different model or a constrained comparison.