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Total Optimum Cost for Manufacturing Model Formula

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The Total Optimum Cost for Manufacturing Model is the sum of the inventory and the order cost. Check FAQs

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

TOC_m - Total Optimum Cost for Manufacturing Model?D - Demand per Year?C_c - Carrying Cost?C₀ - Order Cost?K - Production Rate?

Total Optimum Cost for Manufacturing Model Example

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Here is how the Total Optimum Cost for Manufacturing Model equation looks like with Values.

Here is how the Total Optimum Cost for Manufacturing Model equation looks like with Units.

Here is how the Total Optimum Cost for Manufacturing Model equation looks like.

2828.4271 = \sqrt{2 \cdot 10000 \cdot 4 \cdot 200 \cdot (1 - \frac{10000}{20000})}

2828.4271 = \sqrt{2 \cdot 10000 \cdot 4 \cdot 200 \cdot (1 - \frac{10000}{20000})}

2828.4271 = \sqrt{2 \cdot 10000 \cdot 4 \cdot 200 \cdot (1 - \frac{10000}{20000})}

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Total Optimum Cost for Manufacturing Model Solution

Follow our step by step solution on how to calculate Total Optimum Cost for Manufacturing Model?

FIRST Step Consider the formula

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

Next Step Substitute values of Variables

∴

TOC m = \sqrt{2 \cdot 10000 \cdot 4 \cdot 200 \cdot (1 - \frac{10000}{20000})}

Next Step Prepare to Evaluate

∴

TOC m = \sqrt{2 \cdot 10000 \cdot 4 \cdot 200 \cdot (1 - \frac{10000}{20000})}

Next Step Evaluate

∴

TOC m = 2828.42712474619

LAST Step Rounding Answer

∴

TOC m = 2828.4271

Total Optimum Cost for Manufacturing Model Formula Elements

Variables

Functions

Total Optimum Cost for Manufacturing Model

The Total Optimum Cost for Manufacturing Model is the sum of the inventory and the order cost.

Symbol: TOC_m

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Total Optimum Cost for 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

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

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

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

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 Stock Out Manufacturing Model

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)}}

How to Evaluate Total Optimum Cost for Manufacturing Model?

Total Optimum Cost for Manufacturing Model evaluator uses Total Optimum Cost for Manufacturing Model = sqrt(2*Demand per Year*Carrying Cost*Order Cost*(1-Demand per Year/Production Rate)) to evaluate the Total Optimum Cost for Manufacturing Model, The total optimum cost for manufacturing model is the sum of the inventory and the order cost. It is the actual cost incurred in the production of a given level of output. Total Optimum Cost for Manufacturing Model is denoted by TOC_m symbol.

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

FAQs on Total Optimum Cost for Manufacturing Model

What is the formula to find Total Optimum Cost for Manufacturing Model?

The formula of Total Optimum Cost for Manufacturing Model is expressed as Total Optimum Cost for Manufacturing Model = sqrt(2*Demand per Year*Carrying Cost*Order Cost*(1-Demand per Year/Production Rate)). Here is an example- 2828.427 = sqrt(2*10000*4*200*(1-10000/20000)).

How to calculate Total Optimum Cost for Manufacturing Model?

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

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Total Optimum Cost for Manufacturing Model Formula

Total Optimum Cost for Manufacturing Model Example

Total Optimum Cost for Manufacturing Model Solution

Total Optimum Cost for Manufacturing Model Formula Elements

Other formulas in Manufacturing and Purchase Model category

How to Evaluate Total Optimum Cost for Manufacturing Model?

FAQs on Total Optimum Cost for Manufacturing Model

Variable Name