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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
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- 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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Information and interactive calculators are made available
to you as self-help tools for your independent use and are not intended to provide
investment advice. We can not and do not guarantee their applicability or accuracy
in regards to your individual circumstances. All examples are hypothetical and are
for illustrative purposes. We encourage you to seek personalized advice from qualified
professionals regarding all personal finance issues.
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