Total Cost Curve

The total cost curve is the sum of the costs of acquiring and carrying an inventory item. In logistics, the total cost curve is used to analyze the break-even quantity where the total cost curve and total sales revenue curve intersect. This analysis is helpful in determining the right level of inventory to maintain in order to minimize costs and maximize profits.

As a logistics professional, it is important to be familiar with the concept of the total cost curve and how it can be used for inventory management. In order to optimize inventory levels, you need to understand how your costs are affected by different demand levels and use this information to determine the optimal quantity of inventory to carry at any given point in time. The total cost curve provides insight into these factors and guides you towards achieving your business goals.

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