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Would extra inventory earn its holding cost?
Compare avoided lost contribution and expedite fees with the cost of additional safety stock.
Example scenario
Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.
- Annual units lost to stockouts
- 2,000
- Losses prevented by extra stock
- 60 %
- Contribution / recovered unit
- $25
- Annual expedite cost avoided
- $10,000
- Extra average inventory cash
- $150,000
- Annual holding cost rate
- 25 %
Annual net benefit from extra stock
Example result only, not a forecast or promise.
- Annual contribution recovered
- $30,000
- Annual extra holding cost
- $37,500
- One-time inventory cash required
- $150,000
What to do with this result
Distinguish lost sales from delayed orders and substitutions; do not count the same order in both recovery and expedite benefits.
Know what is inside the model.
Planning model, not personalized financial advice. Your inputs remain in your browser.
Calculation method
Annual benefit = lost units × prevention share × contribution + avoided expedite cost − extra inventory × holding rate.
Assumptions and limitations
- Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
- Demand, lead times and service levels are scenario inputs. Validate variability, physical constraints and supplier terms before ordering.