Practical guide
Understanding inventory and unit economics — two-scenario comparison
Everyday editorial team · GEOINNOVATION CO., LTD · Published · Updated
What this calculation is for
An inventory plan connects expected sales with supplier lead time and safety stock. It can reveal the cash tied up in an order without pretending that future demand is known.
How the method works
Weekly sales times lead-plus-safety weeks gives a reorder threshold. The ordering comparison uses current stock, supplier minimum quantity and unit cost, while unit contribution provides a separate sales-cost reference. The displayed model uses: Reorder point = weekly sales × (lead time + safety weeks); estimate cash required for the order quantity.
A worked example
For an illustrative inventory and unit economics scenario, use Current inventory units: 600 units; Average units sold per week: 90 units/week; Supplier lead time: 4 weeks; Safety-stock weeks: 2 weeks; Wholesale cost per unit: 18 $; Selling price per unit: 45 $; Supplier minimum order quantity: 100 units. The modeled suggested reorder quantity is 100 units. These are example assumptions, not current prices, official benefit amounts or personalized advice.
Assumptions and real-world differences
The suggested order should not be interpreted as a mandatory immediate purchase: review stock coverage and the supplier minimum. Demand seasonality, spoilage, lead-time variability and financing are not forecast. Demand, supplier terms, spoilage, carrying costs and sales seasonality are not forecast.
Building two independent scenarios
Scenario A and Scenario B each have a complete set of inputs for this inventory and unit economics calculation. Change several inputs in B when comparing genuinely different plans, then inspect the B-minus-A headline difference and the detailed rows. When multiple inputs change, the total difference cannot be attributed to just one of them.
Reproduce this tool’s example
These fixed example inputs are independent of edits you make above. Enter them in this tool to reproduce the result, then replace them with your own assumptions.
- Scenario A — Current inventory units
- 600 units
- Scenario A — Average units sold per week
- 90 units/week
- Scenario A — Supplier lead time
- 4 weeks
- Scenario A — Safety-stock weeks
- 2 weeks
- Scenario A — Wholesale cost per unit
- 18 $
- Scenario A — Selling price per unit
- 45 $
- Scenario A — Supplier minimum order quantity
- 100 units
- Scenario B — Current inventory units
- 600 units
- Scenario B — Average units sold per week
- 90 units/week
- Scenario B — Supplier lead time
- 5 weeks
- Scenario B — Safety-stock weeks
- 2 weeks
- Scenario B — Wholesale cost per unit
- 18 $
- Scenario B — Selling price per unit
- 45 $
- Scenario B — Supplier minimum order quantity
- 100 units
Scenario B result: 100 units
Scenario A: 100 units. Suggested reorder quantity.
- Scenario A main result: 100 units
- Scenario B main result: 100 units
- Numeric difference (B − A), in result units: 0
Frequently asked questions
- Does an order quantity prove I need to buy today?
- No. Compare current stock with the reorder threshold and actual lead time before placing an order.
- Which inputs should I check before using this inventory and unit economics estimate?
- Check current inventory units, average units sold per week, supplier lead time, safety-stock weeks, wholesale cost per unit, selling price per unit, supplier minimum order quantity. Match each field’s unit and time period, then compare the detailed rows rather than treating the headline alone as the complete answer.
- Why is this different from the one-factor comparison?
- The one-factor tool changes only supplier lead time. This version lets all model inputs differ, so it is more flexible but does not isolate the effect of any single change.