﻿ Complete Formula for Purchasing Cost Analysis and Calculation (Collection)

# Complete Formula for Purchasing Cost Analysis and Calculation

Complete Formula for Purchasing Cost Analysis and Calculation (Collection)

Cost analysis is the premise of cost management. Cost analysis can be divided into three levels:
1. Price/cost analysis;
3. Analysis of total procurement cost.

Price/cost analysis refers to the analysis of costs in product prices (price = cost + profit), including
A. Manufacturing cost;
B. Financial expenses,
C. Management costs.
D. Sales expenses.

A. Ordering cost,
B. Cost of materials and materials.
C. Inventory cost.
D. Out of stock cost.

Total Purchasing Cost Analysis is Analysis
B. Transportation costs.
C. Quality cost.
D. The total cost of equipment maintenance, etc.

So the analysis of total procurement cost includes the analysis of procurement cost, and the analysis of procurement cost includes the analysis of price/cost.

In this paper, the second level of cost analysis, i. e. procurement cost analysis, is calculated.

Purchasing Cost = Order Cost + Material Cost + Inventory Cost + Out of Stock Cost

1. Ordering cost: including the salary of purchasers, depreciation of purchasing facilities, consumption of purchasing office supplies, travel expenses, telephone and fax expenses, etc. This part of the cost requires financial statistics throughout the year to get the final results.

2. Material cost = quantity * unit price (price / cost analysis is unit price analysis) (assuming there is no discount).

3. Inventory cost: the cost of maintaining inventory, including
A. Interest accrued on funds occupied by materials and materials
B. Material storage costs, and storage costs refer to the total of depreciation charges for warehouse equipment, wages of warehouse personnel, loss of material deterioration and scrap during inventory, insurance costs of materials, etc. Interest on funds occupied by materials is calculated once, while storage costs are the data of financial statistics for the whole year.

4. Out of stock cost; the expenses paid for out of stock, including the cost of stopping work and waiting for materials, overtime, depreciation of facilities, and fines paid for delayed delivery to customers, also depend on financial statistics for the whole year.

2. The calculation of procurement cost:

Assume: the total annual order cost is Ka, the annual storage cost is Kb, the annual shutdown overtime cost is Kc, the annual sales loss (due to delayed delivery) is Kd, the annual purchase total Ke, the annual sales Kf, the annual output value Kg, the annual average total inventory (1/2 of the inventory at the beginning of the year and at the end of the year) Kh, the monthly interest rate Ki, the order days X, the inventory days Y, the out-of-stock days Z, the number of materials A, unit price B.

1. Calculation of Order Cost F(1)
The total cost of an annual order is Ka
B Annual order cost per dollar product = Ka/Ke
C Annual order cost per product = B*Ka/Ke
D Daily Ordering Cost per Product = B*Ka/Ke/365
E Daily order cost per batch = A*B*Ka/Ke/365
F Ordering cost F(1)=X*A*B*Ka/Ke/365 for each batch of products under actual order days

2. Cost calculation of materials and materials
A Material Cost F(2)=A*B

3. Calculation of Inventory Cost F(3)
A year's storage fee is Kb
B Average annual total inventory (1/2 of inventory at the beginning of the year and at the end of the year)Kh
C The annual storage cost per dollar of material = Kb / Kh
D Annual storage cost per piece of material = B*Kb/Kh
E Daily storage cost per piece of material = B*Kb/Kh/365
F Daily storage cost per batch of materials = A*B*Kb/Kh/365
G Deposit cost per batch of materials under actual inventory days = Y*A*B*Kb/Kh/365
H Occupancy interest per batch of materials under actual inventory days = Y*A*B*Ki/30
I F(3) = Y*A*B*Kb/Kh/365+Y*A*B*Ki/30

4. Calculation of Shortage Cost F(4)
A-year shutdown overtime cost Kc
B The loss of annual sales (due to delayed delivery) is Kd
C Annual sales Kf, annual output value Kg, total annual procurement Ke
D Annual shutdown overtime due to procurement delays = Kc*Ke/Kg
E Loss of annual sales due to delayed delivery due to procurement delays = Kd*Ke/Kf
F Total annual shortage cost due to procurement delays = Kc*Ke/Kg+Kd*Ke/Kf
G Cost of material out of stock per dollar = Kc*/Kg+Kd*/Kf
H Daily shortage cost per dollar of materials = (Kc*/Kg+Kd*/Kf)/365
I Daily out-of-stock cost per piece of material = B* (Kc*/Kg+Kd*/Kf)/365
J Daily shortage cost per batch of materials = A*B* (Kc*/Kg+Kd*/Kf)/365
K Cost F(4)=Z*A*B*(Kc*/Kg+Kd*/Kf)/365 for each batch of materials under actual shortage days

5. The purchase cost of each batch of materials F = F(1)+F(2)+F(3)+F(4)
F= X*A*B*Ka/Ke/365+A*B+Y*A*B*B*B*Kb/Kh/365+Y*A*B*Ki/30+Z*A*B*(Kc*/Kg+Kd*/Kf)/365
F= A*B* [X*Ka/Ke/365+1+Y*Kb/Kh/365+Y*Ki/30+Z* (Kc*/Kg+Kd*/Kf)/365]
The above company is established on the condition that the supplier's materials are paid in one time, and the materials are discounted once after they are put into storage. If the same batch of materials are not delivered in one time or after they are put into storage, they are not discounted once, and the quantity and quantity of each time are not uniform, then they need to be used in the cost of each piece (quantity, days). ) The definite integral evaluation of binary functions. F=t*dt DQ (t days, Q quantity)

The reason why we consider allocating annual costs with materials per dollar instead of the number of orders is that in reality, an order is often not a product (there are many products on an order). This one product is ordered with two products at the same time, and the next one product is ordered with three products at the same time, so the order cost of one product in these two times can not be calculated. However, in terms of materials per yuan, as long as the price and quantity are fixed, the effect of the number of orders need not be taken into account. The same allocation of annual inventory and out-of-stock is made.

### Recommend

#### News

0794-7880666

Mon-Fri 08:30~17:30