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Inventory Cost Rate (Smart Phone)
Inventory Cost Rate (Smart Phone)
Inventory cost /week/unit = Annual capital cost/52 + (product value - liquidation value) / Product life-cycle
$20.00
Inventory cost /week/unit = Annual capital cost/52 + (product value - liquidation value) / Product life-cycle
$8.00
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
e) / Product life-cycle
250.00
200.00
150.00
100.00
50.00
0.00
Hot-Smart Hot-Feature Cold-Smart Cold-Feature
% savings by Pull
88.40%
% Savings
Pull vs. push 80%
Hot-Smart 53.86%
20%
Hot-Feature -12.02%
0%
-20%
Cold-Smart Co
Picking/Packi
Push Inventory cost Shipping cost ng cost
22 Hot-Smart $4,834 431.6338983 18.88474576
$165,770
Picking/Packi
Pull Inventory cost Shipping cost ng cost
22 Hot-Smart 100 2158.169492 179.8474576
20 Hot-Feature 40 1795.728814 149.6440678
15 Cold-Smart 40 30.96 2.58
11 Cold-Feature 16 117.1111111 9.759259259
Total $3,776 $85,147 $7,096
$96,019
% saving 42.08%
100%
88.40%
80%
65.50%
60% 53.86%
40%
20%
0%
-12.02%
-20%
Cold-Smart Cold-Feature Hot-Smart Hot-Feature
Inventory Picking/Pack
cost Shipping cost ing cost
Push $147,970 $17,029 $771
$180,000
$160,000
$140,000
$120,000
$100,000
Picking/Packing cost
$80,000
Shipping cost
$60,000
Inventory cost
$40,000
$20,000
$0
Push Pull