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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
The Average Store
160.00
140.00
120.00
100.00
80.00
60.00
e) / Product life-cycle 40.00
20.00
0.00
Hot-Smart Hot-Feature Cold-Smart Cold-Feature
% savings by Pull
86.70%
% Savings
Pull vs. push 80%
60%
Cold-Smart 86.70%
40%
Cold-Feature 37.56%
20%
Hot-Smart 42.51%
0%
Hot-Feature -15.91%
-20%
-40%
Cold-Smart Co
Picking/Packi
Push Inventory cost Shipping cost ng cost
22 Hot-Smart $2,913 326.8881356 14.52033898
$100,440
Picking/Packi
Pull Inventory cost Shipping cost ng cost
22 Hot-Smart 100 1634.440678 136.2033898
20 Hot-Feature 40 1014.508475 84.54237288
15 Cold-Smart 40 24.27906977 2.023255814
11 Cold-Feature 16 75.2 6.266666667
Total $3,776 $57,439 $4,787
$66,002
% saving 34.29%
100%
86.70%
80%
60%
42.51%
40% 37.56%
20%
0%
-20% -15.91%
-40%
Cold-Smart Cold-Feature Hot-Smart Hot-Feature
Inventory Picking/Pack
cost Shipping cost ing cost
Push $88,413 $11,488 $540
$120,000
$100,000
$80,000
Shipping cost
$40,000
Inventory cost
$20,000
$0
Push Pull