Logistics & Supply Chain

Basic

Cost Per Unit Shipped

Total shipment cost spread across the units delivered.

Formula

C_u = \frac{C_{total}}{n}

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Variables

C_uCost per unit

C_{total}Total freight cost

nUnits shipped

Example

$1200 for 400 units: C_u = $3

Did You Know?

Consolidating small shipments into full loads is the fastest way to drop cost per unit.

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More in Logistics & Supply Chain

Economic Order Quantity

Order size that minimises the combined cost of ordering and holding stock.

Reorder Point

Stock level that triggers a new order, covering demand during the lead time.

Safety Stock

Buffer inventory that absorbs demand variability during lead time.

Inventory Turnover

How many times inventory is sold and replaced in a period.

Days Inventory Outstanding

Average number of days stock sits before being sold.

Little's Law

Average items in a system equals arrival rate times average time in the system.