Inventory Optimisation ROI

Calculate the ROI of better inventory management

See what better inventory management could mean for your bottom line. Enter a few figures about your inventory and sales to estimate the potential annual savings from carrying less excess stock, reducing holding costs and avoiding lost sales.

ROI Calculator

Estimate your annual benefit

Enter your inventory and sales figures to calculate the financial value of optimising with AGR.

Total annual benefit

£0

Estimated annual value from inventory optimisation

Currency

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Inventory

Average Inventory Investment

Reduction of Excess Inventory How much you can lower stock held above what you realistically expect to sell or use.Typical reduction: 10–30%

Average Annual Holding Cost The total annual cost of keeping inventory, including cost of capital, insurance, storage, labour, and depreciation.Typical holding cost: 10–20%

Sales

Annual Sales

Gross Average Margin

Suspected Sales Lost to Stockouts

Breakdown

Holding Cost Savings Avoided holding cost flows straight to the bottom line. Every pound of excess inventory you stop carrying is a pound of profit recovered.

From reducing excess inventory

£0

50% of total

Improved Profit Margin

From recovering lost sales

£0

50% of total

Results are indicative estimates based on your inputs. Actual outcomes will vary depending on your operations and market conditions.

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Frequently Asked Questions

Quick answers regarding inventory KPIs and formulas.

How do you calculate safety stock?

The standard safety stock formula is: (Maximum Daily Sales × Maximum Lead Time) – (Average Daily Sales × Average Lead Time). This ensures you have enough buffer inventory to handle unexpected spikes in demand or supply chain delays.

What is a good inventory turnover ratio?

A good inventory turnover ratio generally falls between 4 and 6 for most retail and manufacturing businesses. This indicates that a company is restocking items efficiently without overstocking. However, this varies heavily by industry.

What does OTIF mean in supply chain?

OTIF stands for On-Time In-Full. It is a key performance indicator that measures a supplier’s ability to deliver the expected product in full at the expected time. It is calculated as (Number of OTIF Orders / Total Orders) × 100.

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“We have definitely seen an improvement in the service level. Just before we implemented AGR it was 82%, it had dropped down one point to 78% and now we're currently running around 92%..”

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“It is still early stages but it is giving us the ability to plan ahead more accurately and deal with potential stock issues before they become a problem. This is improving our service levels to customers.”