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  • Inventory Cost Rate (Smart Phone)

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    The document provides cost rates for inventory, shipping, and picking for two types of phones - smart phones and feature phones. The inventory cost per week is calculated based on the product value, liquidation value, life cycle, and capital return rate. The shipping cost for overnight FedEx is also provided. Data on weekly sales averages and on-hand inventory is given for a sample store sorting phones into hot and cold categories by type.

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    8GVh6sOVEemItwoR4C25iA_96f64d72768f4fe895735ef83a6a99d8_Data-cost

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    The document provides cost rates for inventory, shipping, and picking for two types of phones - smart phones and feature phones. The inventory cost per week is calculated based on the product value, liquidation value, life cycle, and capital return rate. The shipping cost for overnight FedEx is also provided. Data on weekly sales averages and on-hand inventory is given for a sample store sorting phones into hot and cold categories by type.

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    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views2 pages

    Inventory Cost Rate (Smart Phone)

    Uploaded by

    unknown
    The document provides cost rates for inventory, shipping, and picking for two types of phones - smart phones and feature phones. The inventory cost per week is calculated based on the product value, liquidation value, life cycle, and capital return rate. The shipping cost for overnight FedEx is also provided. Data on weekly sales averages and on-hand inventory is given for a sample store sorting phones into hot and cold categories by type.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Cost rates

    Inventory cost rate (smart phone)

    Product value = $500


    Liquidation value = $0.00
    Life-cycle = 26 weeks
    Capital return rate = 8% of product value

    Inventory cost /week/unit = Annual capital cost/52 + (product value - liquidation value) / Product life-cycle
    $20

    Inventory cost rate (feature phone)

    Product value = $200


    Liquidation value = 0
    Life-cycle = 26 weeks
    Capital return rate = 8% of product value

    Inventory cost /week/unit = Annual capital cost/52 + (product value - liquidation value) / Product life-cycle
    $8

    FedEx freight cost (overnight) = $12

    Overnight/standard 2D = 2.5
    Volume discount = 50%
    Standard freight rate = $2.40

    First pick $1
    followup picks $0.10
    Data for an average store

    Weekly sales On-hand


    average inventory
    Hot-Smart 99.31 122
    Hot-Feature 102.58 109
    Cold-Smart 2.74 16
    Cold-Feature 6.53 24

    alue) / Product life-cycle The average store


    140

    120

    100

    80

    60

    40
    alue) / Product life-cycle
    20

    0
    Hot-Smart Hot-Feature Cold-Smart Cold-Feature
    Weekly sales average On-hand inventory

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