Administrative costs for purchasing and goods receipt (excluding transport)
Includes costs like purchase order processing, supplier communication, receiving, inspection, etc. (excluding transport-related costs)
Cost to transport one unit
Represents the cost per piece for transport packaging (e.g., pallet, container, box). Calculate this based on your specific scenario and replenishment frequency.
Cost to purchase one unit
Annual interest rate for holding cost calculation
Typically the weighted average cost of capital (WACC). Used to calculate the holding cost based on the purchase price.
Average units demanded per day
Days between order placement and receipt
For desired service level
Z-score corresponds to service level. E.g., 1.65 for 95% service level. See Z-Score table in results for more.