Total Annual Inventory Cost Calculator

Calculate your total annual inventory cost using this online financial calculator. Sometimes its hard to determine the total cost involved in the inventory for your company. Our total annual inventory cost calculator helps you to calculate it with ease. In the below calculator just enter the demand, cost per unit, order quantity, annual holding and storage cost per unit of inventory, cost of planning order/setup cost and submit to know the total inventory cost.

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Calculate your total annual inventory cost using this online financial calculator. Sometimes its hard to determine the total cost involved in the inventory for your company. Our total annual inventory cost calculator helps you to calculate it with ease. In the below calculator just enter the demand, cost per unit, order quantity, annual holding and storage cost per unit of inventory, cost of planning order/setup cost and submit to know the total inventory cost.

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Formula:

TC = (D x C) + ((Q / 2) x H) + ((D / Q) x S) Where, TC = Total Annual Inventory cost D = Demand C = Cost Per Unit Q = Order Quantity S = Cost of Planning Order/Setup Cost H = Annual Holding and Storage Cost Per Unit of Inventory

Example:

Calculate the total annual inventory cost of a cotton manufacturing company which has the demand of 20, cost per unit price of 25, order quantity of 32, annual holding and storage cost per unit of inventory of 20 and setup cost of 25.

Solution:

TC = (20 x 25) + ((32 / 2) x 20) + ((20 / 32) x 25)
= 835.625

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