EMS Higher Education and Vocational Training-Formula of Camp- Formula of Camphttp://ems-education.eu/content/2012/09/formula-of-camp<p> </p>
<p class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">A company is selling 900 units of a certain product each year.<br /></span></span></span><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">The fixed cost per order amounts to € 10.00.<br /></span></span></span><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">The cost of holding one unit in stock can be calculated from:<br /></span></span></span><span style="mso-fareast-font-family: Arial; mso-bidi-font-family: Arial; mso-ansi-language: EN-GB;" lang="EN-GB"><span style="mso-list: Ignore;"><span style="font-family: Arial; font-size: small;">-</span><span style="font: 7pt/normal 'Times New Roman'; font-size-adjust: none; font-stretch: normal;"> </span></span></span><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">its cost price, being € 25.00<br /></span></span></span><span style="mso-fareast-font-family: Arial; mso-bidi-font-family: Arial; mso-ansi-language: EN-GB;" lang="EN-GB"><span style="mso-list: Ignore;"><span style="font-family: Arial; font-size: small;">-</span><span style="font: 7pt/normal 'Times New Roman'; font-size-adjust: none; font-stretch: normal;"> </span></span></span><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">the interest rate of 8% per annum<br /></span></span></span><span style="mso-fareast-font-family: Arial; mso-bidi-font-family: Arial; mso-ansi-language: EN-GB;" lang="EN-GB"><span style="mso-list: Ignore;"><span style="font-family: Arial; font-size: small;">-</span><span style="font: 7pt/normal 'Times New Roman'; font-size-adjust: none; font-stretch: normal;"> </span></span></span><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;"><span style="font-family: Arial;">other cost for holding inventory of 12% of its cost price.</span></span></span></p>
<p><span style="font-family: Arial;"><span style="mso-ansi-language: EN-GB;" lang="EN-GB"><span style="font-size: small;">Applying those data into the formula </span></span><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; mso-ansi-language: EN-GB;" lang="EN-GB">Q<sub>o</sub> = </span></strong><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 14pt; mso-bidi-font-family: Arial; mso-ansi-language: EN-GB;" lang="EN-GB">√</span></strong><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12pt; mso-ansi-language: EN-GB;" lang="EN-GB"> (2*D*C<sub>o</sub> / C<sub>i</sub>) </span></strong><span style="font-size: small;"><span style="mso-ansi-language: EN-GB;" lang="EN-GB">will result in:</span></span></span></p>
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