Acquisition costs from a weekly order cycle can absorb profits. Overstock from unbalanced orders, bumped up to meet vendor minimums, can erase what’s left of your profit. Your forecast accuracy must be perfect when ordering weekly, or you will have lost sales. The combination of inaccurate forecast and overstocks will create the ‘bullwhip effect’ eating away your GMROI and inventory profits.
We optimize the order cycle by considering acquisition cost, admin fees, carrying cost, service goal, lost sales, vendor minimums, days of week to order, bracket pricing, shelf life, unit of measure variations ($,#,container, trucks, etc.), safety stock, lead time, multi-echelon dynamics (X-dock, direct, DC-Store) and product/location sales forecast over time (seasonality).
Are you tired of doing the same thing each week and getting the same results? Then Data Profits’ Inventory Optimization can help, providing you with the right way to grow profits.
Each vendor is different. Some will ship any day, others on certain days only. Vendors may require a minimum order based on one or multiple requirements like dollars total and rounded to pallet quantity. Minimums might include:
Bulk buying for a price discount makes sense right?
Data Profits’ Inventory Optimization module is the wake up call to how your business buys into a deal and bulk buy discounts. Get a real picture of the deal:
Good things do not last forever. Some products left on the shelf too long force you to trash the inventory, lose consumer goodwill and any profits.Data Profits Order Inventory Optimization program understands the importance of shelf life in the product life-cycle. Too many days on the shelf for some products spell doom to your bottom line:
True COGS is based upon a host of factors that include materials cost, acquisition cost and holding cost.
Acquisition cost of inventory includes those costs – minus discounts and returns – that are incurred to bring the inventory to a sellable condition. Examples might include
True COGS is based upon a host of factors that include materials cost, acquisition cost and holding cost. Acquisition Cost Acquisition cost of inventory includes those costs – minus discounts and returns – that are incurred to bring the inventory to a sellable condition. Examples might include cost to move the inventory to the selling location and costs to unpack and price.
Carrying cost of inventory includes those costs incurred over a period of time to hold and store inventory. Examples might include depreciation, taxes, insurance, employee cost, building storage, opportunity cost, and cost of capital.
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