Order point formula, Financial Accounting

Assignment Help:

Order Point Formula

The analysis discussed above tends to be somewhat cumbersome when probability distributions are most complex and dependent and multi-period cases are involved. In view of that several firms would search the subsequent formula helpful for calculating the reorder point.

Recorder Point = S (L) + √(SR (L))

 Here S = Usage

L = lead time required to acquired additional inventory as the order is placed

R =average quantity ordered

F = stock-out acceptance factor.

The value of F, the stock-out acceptance factor is based on the stock-out percentage rate.


Related Discussions:- Order point formula

Explain in the money and out of the money option, Q. Explain In the Money a...

Q. Explain In the Money and Out of the Money option? In the Money option - Option granted with an exercise price below market price on grant date Out of the Money option - O

Explain the auditing standards, Q. Explain the Auditing Standards? Audi...

Q. Explain the Auditing Standards? Auditing Standards - Guidelines to which an AUDITOR adheres. Auditing standards encompassauditor's professional qualities, as well as her or

History of trust-trusts laws and accounts, History of trust The followi...

History of trust The following general information should be kept with the trust documents: Summary of will or trust deed; Short history of the trust; Trustees’ nam

What is the total risk and total return, Financials Investments, a group of...

Financials Investments, a group of financial advisors and retirement planners, has been requested to provide advice on how to invest $200,000 for one of its clients. The client has

When youre using accounting software, when youre using accounting software ...

when youre using accounting software why would you use hot keys and shortcuts a.to quickly access commands b.to input data for you c.to start the program d.to write checks

Reasons for holding inventory, The dictionary explains the word 'inventory'...

The dictionary explains the word 'inventory' as stock of goods. Although, inventory implies that such type of assets that will be disposed of in future in the common course of busi

What is the approximate tax rate, 1. From your review of note 3.7, how does...

1. From your review of note 3.7, how does the company determine whether a sale has occurred? 2. Using the consolidated income statement and consolidated statement of financial p

Rental loss, Jane makes a living renting expensive state of the art surveil...

Jane makes a living renting expensive state of the art surveillance equipment to detectives and nervous spouses. Her average rental period is 27 days. The rental price includes all

Corporation accounting oversight board, PCAOB - Public Corporation Accounti...

PCAOB - Public Corporation Accounting Oversight Board, a private-sector, non-profit corporation created by Sarbanes-Oxley Act of 2002, to oversee AUDITORs of public companies in or

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd