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Maximum Stock Out Manufacturing Model Formula

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The Maximum Stock out Manufacturing Model is the maximum capacity of a business to stock goods. Check FAQs

Q 1 = \sqrt{2 \cdot D \cdot C 0 \cdot C s \cdot \frac{1 - \frac{D}{K}}{C c \cdot (C c + C s)}}

Q₁ - Maximum Stock out Manufacturing Model?D - Demand per Year?C₀ - Order Cost?C_s - Shortage Cost?K - Production Rate?C_c - Carrying Cost?

Maximum Stock Out Manufacturing Model Example

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Here is how the Maximum Stock Out Manufacturing Model equation looks like with Values.

Here is how the Maximum Stock Out Manufacturing Model equation looks like with Units.

Here is how the Maximum Stock Out Manufacturing Model equation looks like.

656.5322 = \sqrt{2 \cdot 10000 \cdot 200 \cdot 25 \cdot \frac{1 - \frac{10000}{20000}}{4 \cdot (4 + 25)}}

656.5322 = \sqrt{2 \cdot 10000 \cdot 200 \cdot 25 \cdot \frac{1 - \frac{10000}{20000}}{4 \cdot (4 + 25)}}

656.5322 = \sqrt{2 \cdot 10000 \cdot 200 \cdot 25 \cdot \frac{1 - \frac{10000}{20000}}{4 \cdot (4 + 25)}}

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Maximum Stock Out Manufacturing Model Solution

Follow our step by step solution on how to calculate Maximum Stock Out Manufacturing Model?

FIRST Step Consider the formula

Q 1 = \sqrt{2 \cdot D \cdot C 0 \cdot C s \cdot \frac{1 - \frac{D}{K}}{C c \cdot (C c + C s)}}

Next Step Substitute values of Variables

∴

Q 1 = \sqrt{2 \cdot 10000 \cdot 200 \cdot 25 \cdot \frac{1 - \frac{10000}{20000}}{4 \cdot (4 + 25)}}

Next Step Prepare to Evaluate

∴

Q 1 = \sqrt{2 \cdot 10000 \cdot 200 \cdot 25 \cdot \frac{1 - \frac{10000}{20000}}{4 \cdot (4 + 25)}}

Next Step Evaluate

∴

Q 1 = 656.532164298613

LAST Step Rounding Answer

∴

Q 1 = 656.5322

Maximum Stock Out Manufacturing Model Formula Elements

Variables

Functions

Maximum Stock out Manufacturing Model

The Maximum Stock out Manufacturing Model is the maximum capacity of a business to stock goods.

Symbol: Q₁

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Maximum Stock out Manufacturing Model

Demand per Year

Demand per Year is the number of goods that consumers are willing and able to purchase at various prices during a given year.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Demand per Year

Order Cost

Order Cost is the expenses incurred to create and process an order to a supplier.

Symbol: C₀

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Order Cost

Shortage Cost

The Shortage Cost is called the associate cost and is equal to the product's contribution margin.

Symbol: C_s

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Shortage Cost

Production Rate

Production Rate refers to the number of goods that can be produced during a given period of time.

Symbol: K

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Production Rate

Carrying Cost

Carrying Cost is the total of all expenses related to storing unsold goods, and refers to the total cost of holding inventory.

Symbol: C_c

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Carrying Cost

sqrt

A square root function is a function that takes a non-negative number as an input and returns the square root of the given input number.

Syntax: sqrt(Number)

Other formulas in Manufacturing and Purchase Model category

Go EOQ Manufacturing Model with No Shortage

EOQ m = \sqrt{\frac{2 \cdot C 0 \cdot D}{C c \cdot (1 - \frac{D}{K})}}

Go EOQ Manufacturing Model with Shortage

EOQ ms = \sqrt{2 \cdot D \cdot C 0 \cdot \frac{C s + C c}{C c \cdot C s \cdot (1 - \frac{D}{K})}}

Go EOQ Purchase Model with No Shortage

EOQ p = \sqrt{2 \cdot D \cdot \frac{C 0}{C c}}

Go Maximum Inventory Purchase Model

Q purch = \sqrt{2 \cdot D \cdot \frac{C 0}{C c} \cdot (\frac{C s}{C s + C c})}

How to Evaluate Maximum Stock Out Manufacturing Model?

Maximum Stock Out Manufacturing Model evaluator uses Maximum Stock out Manufacturing Model = sqrt(2*Demand per Year*Order Cost*Shortage Cost*(1-Demand per Year/Production Rate)/(Carrying Cost*(Carrying Cost+Shortage Cost))) to evaluate the Maximum Stock out Manufacturing Model, The maximum stock out manufacturing model is the maximum capacity of a business to stock goods. It is the difference between the economic order quantity to the maximum inventory. Maximum Stock out Manufacturing Model is denoted by Q₁ symbol.

How to evaluate Maximum Stock Out Manufacturing Model using this online evaluator? To use this online evaluator for Maximum Stock Out Manufacturing Model, enter Demand per Year (D), Order Cost (C₀), Shortage Cost (C_s), Production Rate (K) & Carrying Cost (C_c) and hit the calculate button.

FAQs on Maximum Stock Out Manufacturing Model

What is the formula to find Maximum Stock Out Manufacturing Model?

The formula of Maximum Stock Out Manufacturing Model is expressed as Maximum Stock out Manufacturing Model = sqrt(2*Demand per Year*Order Cost*Shortage Cost*(1-Demand per Year/Production Rate)/(Carrying Cost*(Carrying Cost+Shortage Cost))). Here is an example- 656.5322 = sqrt(2*10000*200*25*(1-10000/20000)/(4*(4+25))).

How to calculate Maximum Stock Out Manufacturing Model?

With Demand per Year (D), Order Cost (C₀), Shortage Cost (C_s), Production Rate (K) & Carrying Cost (C_c) we can find Maximum Stock Out Manufacturing Model using the formula - Maximum Stock out Manufacturing Model = sqrt(2*Demand per Year*Order Cost*Shortage Cost*(1-Demand per Year/Production Rate)/(Carrying Cost*(Carrying Cost+Shortage Cost))). This formula also uses Square Root (sqrt) function(s).

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Maximum Stock Out Manufacturing Model Formula

Maximum Stock Out Manufacturing Model Example

Maximum Stock Out Manufacturing Model Solution

Maximum Stock Out Manufacturing Model Formula Elements

Other formulas in Manufacturing and Purchase Model category

How to Evaluate Maximum Stock Out Manufacturing Model?

FAQs on Maximum Stock Out Manufacturing Model

Variable Name