EOQ / Inventory Reorder Calculator mechanism

Model scope

The EOQ and reorder-point formulas are standard under classical inventory assumptions, but the specification is incomplete for its stated outputs. Define daily demand explicitly, define the total-cost formula and inclusions, specify the 365/360/business-day convention, and add validation for zero or negative inputs before labeling the instrument fully verified.

• EOQ=√(2DS/H) is the standard classical EOQ formula when D is annual unit demand, S is ordering cost per order, and H is annual holding cost per unit; those unit assumptions must be enforced.
• ReorderPoint=daily_demand*lead_time_days+safety_stock is standard, but daily_demand is not an explicit input or defined as D/365 in the specification.
• The specification lists orders/year and total cost as outputs but supplies no formulas for them. A standard assumption is orders_per_year=D/EOQ and relevant_annual_total_cost=(D/EOQ)*S+(EOQ/2)*H, excluding purchase cost.
• The total-cost definition is ambiguous: it does not state whether purchase cost, shortage cost, safety-stock holding cost, or other inventory costs are included.

Units and conventions

• D is annual demand in units/year.
• S is ordering cost in currency/order.
• H is annual holding cost in currency/unit/year.
• EOQ is reported in units.
• lead_time_days is measured in calendar days, and daily demand is assumed to be D/365 units/day.
• safety_stock is measured in units.

Inspectable vector

One of 4 source-bound review vectors:

{
  "inputs": {
    "annual_demand_D_units_per_year": 7200,
    "order_cost_S_currency_per_order": 50,
    "holding_cost_H_currency_per_unit_per_year": 2,
    "lead_time_days": 14,
    "safety_stock_units": 80
  },
  "expected_outputs": {
    "eoq_units": 600,
    "reorder_point_units": 356.1643836,
    "orders_per_year": 12,
    "annual_relevant_total_cost_currency": 1800
  },
  "working": "EOQ = √(2×7200×50/2) = √360000 = 600 units. Daily demand = 7200/365 = 19.7260274 units/day. Reorder point = 19.7260274×14+80 = 276.1643836+80 = 356.1643836 units. Orders/year = 7200/600 = 12. Ordering cost = 12×50 = 600. Holding cost = (600/2)×2 = 600. Total relevant annual cost = 600+600 = 1800."
}

Failure boundary

BREAK_CLAIMED · SELF_FLAGGED

The calculator should reject H=0 because EOQ divides by zero, and should reject negative annual demand because the EOQ square-root argument becomes negative. In addition, the unspecified annual-to-daily conversion convention changes the reorder point: 105 units using 365 days versus 106.388888888889 units using 360 days.

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche5/tranche5-results.json
• BOUNDARY_HAZARD_CATALOG.json