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This calculator helps you determine how much inventory you should hold, and when you should place inventory orders. The calculation attempts to keep your inventory level as efficient as possible, while maintaining adequate safety stock.
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Definitions
- Initial demand per week
- Your initial expected demand per week.
- Annual growth rate
- What you expect your annual sales growth to be over the next year.
- Safety stock
- Expressed as a percent of your sales, this is the level of inventory you require as safety stock. This stock is used to protect against out of stock situations.
- Order lead time in weeks
- How long it takes an order for
more inventory to be received into inventory. This calculator assumes orders arrive in one batch with a known lead time, arriving just as stock is exhausted.
- Starting inventory
- Amount of inventory you currently have on hand.
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