Inventory carrying costs is the amount spent by a business to stock and store items before they’re sold. Carrying costs are usually 20% to 30% of the value of a company's inventory.
A business’s contribution margin—also called the gross margin—is the money left over from sales after paying all variable expenses associated with producing a product.
Your lead time is how long it takes to process, prepare materials, manufacture and deliver your order.
Please provide your current customer service level.
Service level is the expected probability of not hitting a stock-out during the next replenishment cycle, and thus, it is also the probability of not losing sales To calculate your service level:
Please provide an estimate of revenue increase per 1% of service level improvement. Key factors to consider are the impact of sales lost due to stock outs as well as increased revenue from greater responsiveness.
On average our clients obtain service levels between 95% and 99%. Toggle the bar to simulate the types of annual benefits you would obtain with different service levels.
Increased annual revenue
Compressing lead time enables you to compete more effectively in the market. Please provide an estimate of revenue increase per 5 days of lead time compression.
On average our clients observe a 30% compression of their lead times. Toggle the bar to simulate the types of annual benefits you would obtain with different lead times.
Increased annual revenue 0
On average our clients observe a 20-40% reduction of their inventory. Toggle the bar to simulate the types of annual benefits you would obtain with different inventory levels.
Cash release 0