Idle Inventory Cost Calculator for Your Clinic
Loading the calculator. If it does not appear, enable JavaScript in your browser.
Buying cheaper in quantity always seems like a good idea, until the product sits on the shelf for months. That idle money has a cost: the return it failed to earn and the chance of passing its expiry date. The calculator puts both in reais so you can compare them with the discount the supplier offered.
Everything happens in your browser. The starting values are a hypothetical example.
What does each field mean?
| Field | What to enter |
|---|---|
| Value of idle inventory | How much was paid for the product that is not moving. |
| Months it sits idle | How long, on average, until it is used. |
| What the money would earn per month | Monthly rate of an investment or the cost of the debt you could pay off. |
| Chance of loss from expiry | An honest estimate of the share that may expire before use. |
How is it calculated?
- Lost return = value × ((1 + monthly rate) raised to months, minus 1).
- Expiry loss = value × chance of loss.
- Total cost = lost return + expiry loss.
- Cost per idle month = total cost ÷ months.
Worked hypothetical example
Hypothetical example: R$ 12,000.00 idle for 4 months, a 1% monthly rate and a 5% chance of loss from expiry.
| Step | Calculation | Result |
|---|---|---|
| Lost return | 12,000 × (1.01 raised to 4, minus 1) | R$ 487.25 |
| Expiry loss | 12,000 × 5% | R$ 600.00 |
| Total cost | 487.25 + 600 | R$ 1,087.25 |
| Cost per idle month | 1,087.25 ÷ 4 | R$ 271.81 |
| As a share of inventory value | 1,087.25 ÷ 12,000 | 9.1% |
If the bulk discount was less than 9.1%, the purchase did not pay off in this scenario.
How do I use the result?
Use the cost to decide the size of the purchase and to size safety stock with the reorder point. Compare offers by cost per ml in the supplier comparison and remember that losses and leftovers go into the real cost per ml.
Frequently asked questions
Does idle inventory have a cost even if it is not spent?
Yes. The tied-up money could earn a return or pay off debt, and the product may expire before it is used.
What rate should I use for the opportunity cost?
Use a realistic investment rate or the cost of your financing, as a monthly percentage. If you carry expensive debt, use the debt rate.
Does buying in bulk always save money?
Only if the discount exceeds the cost of the idle money and the expected loss. Compare with the calculator before you commit.