⚖️ Module 3 Prep • Chapter 20

Inventory Balancer

Find the sweet spot where ordering costs meet holding costs

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⏱️ 30s

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Annual Demand
—
Ordering Cost
—
Holding Cost
—
📦 Order Quantity
How many units per order? 250 units
50 150 250 350 450 500
📊 Cost Breakdown
Ordering
$2,000
Holding
$2,000
Low quantity ← Ordering costs decrease | Holding costs increase → High quantity
Total Annual Cost
$4,000
Move the slider to find the minimum cost
Your Score
0
Round 1 of 5
💡 The EOQ Insight

Order too little → you place many orders → high ordering costs

Order too much → you hold lots of inventory → high holding costs

The sweet spot balances both!

EOQ = √(2DS / H)

In Practice Operations Module 3, you'll make these exact decisions when ordering raw materials from suppliers. Order too early? Holding costs eat your profits!

🎯 Quick Tips
📉 Watch the green total cost curve — it dips at the optimal point
⚖️ At EOQ, ordering cost ≈ holding cost
⚡ Closer to optimal = more points!