Accounting - Secrets to Managing Inventory including Economic Order Quantity (EOQ)

In this video I discuss the various different inventory management terminology including inventory buffer, lead time, re-order levels, re-order quantity and maximum inventory levels.

I explain how to calculate the re-order quantity and what is meant by the Economic Order Quantity and the formula to calculate this.

This includes the annual usage, ordering costs and inventory holdings costs, here I provide an explanation behind each of them and how they are relevant in the formula for calculating EOQ.

Finally I provide an example of how to calculate the eoq model in inventory maangement.

This video is useful for anyone studying managing inventory at AAT level 3 or AAT level 4 or individuals looking at inventory management.

For the full list of accounting tutorials on this channel see below: