Total Inventory Cost Calculator
Free
Calculate and analyze total inventory costs including holding, ordering, purchase, and stockout components
Total Inventory Cost Formulas
Formula: Total Cost = Holding Cost + Ordering Cost + Purchase Cost + Stockout Cost
Where:
- Holding Cost = Average Inventory × Unit Cost × Holding Rate
- Ordering Cost = Number of Orders × Cost per Order
- Purchase Cost = Annual Demand × Unit Cost
- Stockout Cost = Annual cost of stock shortages
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Please note that calculations provided by this tool are for estimation and trial purposes only. The calculator may produce inaccurate results beyond our control. Calculatorlogy assumes no responsibility or liability for any errors or discrepancies in the calculations provided.
How to use Total Inventory Cost Calculator
- Enter your average inventory level in units
- Input the annual holding rate as a percentage
- Specify the number of orders placed per year
- Enter the cost per order amount
- Input the unit cost of inventory items
- Provide the annual demand in units
- Enter the annual stockout cost
- Click calculate to view detailed cost analysis
About Total Inventory Cost Calculator
Total inventory cost calculation integrates multiple expense categories into a comprehensive financial framework. The interplay between holding costs, ordering costs, purchase costs, and stockout costs creates a dynamic system for inventory management.