Reorder Quantity vs Annual Holding Cost Tradeoff
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Supply Chain
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Reorder Quantity vs Annual Holding Cost Tradeoff

Models the cost curve between ordering large 6-month batches to secure factory discounts vs ordering 60-day batches to minimize 3PL storage fees.

Total FOB cost including packaging

Suggested retail price paid by end-consumer

% off MSRP

Standard Keystone wholesale discount is 50%

Tier 2 Wholesale Price (Keystone)
$25.00

Manufacturer Gross Margin: 50.0% ($12.50 / unit)

Key Strategic MetricCalculated Value
Tier 1 (MOQ: 50 units | 45% off)$27.49 (Margin: 54.5%)
Tier 2 (Keystone: 200 units | 50% off)$25.00 (Margin: 50.0%)
Tier 3 (Distributor: 500 units | 55% off)$22.50 (Margin: 44.4%)
Tier 4 (Master Case: 1000 units | 60% off)$20.00 (Margin: 37.5%)
Unit Production Cost (COGS)$12.50
Suggested Retail MSRP$49.99

Keystone pricing (50% off retail) allows the wholesale retailer to double their money while protecting your manufacturing gross profit.

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How to Use This Tool in 3 Easy Steps

1

Enter Annual Unit Demand

Provide estimated annual unit sales volume.

2

Input Tier Price Discounts

Enter unit prices for small, medium, and large production runs.

3

Specify Holding Cost %

Enter annual inventory holding cost (typically 20% to 25% of inventory value).

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