Our Software PeakProfit Maximizes Profit by Optimizing Service Levels

Our algorithm takes into account all relevant factors that influence your inventory costs to maximize profit. These include:

• Lost Sales Cost: The revenue you lose when a product is out of stock. Such costs can be significant, especially for high-demand items, and must be minimized by maintaining an optimal service level.
• Financial Carrying Cost: This represents the interest you could have earned if the funds tied up in inventory were invested elsewhere. It’s an opportunity cost that directly impacts your bottom line, making it crucial to balance inventory levels carefully.
• Physical Carrying Cost: These are the expenses associated with physically storing and handling inventory, including warehousing, utilities, insurance, and the risk of obsolescence. These costs vary by product type but generally fall between 20% and 40% of the inventory’s value.
• Stockout Penalties: In certain industries, particularly aerospace, contracts may include penalties for failing to meet delivery obligations. For example, if you cannot deliver a required part on time, you may incur a penalty, often a percentage of the item’s value.

The algorithm is implemented in our software, PeakProfit, which includes a SaaS API that allows users to make calls programmatically, as well as a user-friendly web application. You can take advantage of our web application for free with basic usage at https://optimize.sscostmodel.com/.

Revolutionize Your Inventory Strategy: The Power of Optimizing Service Levels

Did you know that by setting the service level optimally, you can increase profit by 17%? For years, determining the optimal service level for inventory items has been more of an art than a science. Businesses have often resorted to choosing service levels like 99%, 95%, or 90% without any precise justification, relying on intuition rather than data. But not anymore.

Introducing our groundbreaking software, designed to revolutionize how you approach inventory management. For the first time ever, you can pinpoint the exact service level of inventory items that maximizes your profit. Our software leverages advanced algorithms and data-driven insights to take the guesswork out of inventory decisions, providing precise recommendations tailored to your unique needs.

Stop relying on rough estimates and start making informed, profit-maximizing decisions. You can take advantage of our web application for free with basic usage at https://optimize.sscostmodel.com/.

Live webinar "Costly Mistakes in Determining Safety Stocks and a New Approach"

Don't miss the live webinar "Costly Mistakes in Determining Safety Stocks and a New Approach" taking place tomorrow at 9:00am Eastern.

In this interactive webinar, we'll demonstrate why not considering profit margin when setting service levels and safety stocks can be a costly mistake.

We'll show you firsthand how a new method that accounts for gross margin can better optimize your inventory to maximize profits. Have your own data ready! All we need is a few SKUs' average daily demand, standard deviation of demand, lead time, and gross margin. We'll apply this method to your data live to start increasing your bottom line.

Feel free to reach out with any questions before the webinar. Register now to reserve your spot for this free webinar tomorrow November 15 at 9am Eastern: https://lnkd.in/e8-ZDR2J

Optimize Your Inventory Live: An Interactive Webinar

Join our live, interactive session on Wednesday, November 8 at 9am Eastern where we'll optimize real inventory data right before your eyes.

Bring your own data for products you want to optimize. We'll input the numbers into our system during the webinar including:
- Daily demand (in Units)
- Demand variability (i.e., standard deviation of daily demand)
- Lead time (in Days)
- Margin - calculated as (sale price - purchase price)/purchase price
To give you an idea, the presenter Dr. Jay Zhou will demo the algorithm using data for one of his SKUs:
- Daily demand: 100 units
- Demand variability: 35
- Lead time: 21 days
- Margin: 45%

You'll see our optimization algorithm at work as we determine live on the webinar:
- Service level targets
- Safety stock requirements
- Ideal re-order quantities

This is a truly hands-on session where you'll get to optimize your own inventory with real recommendations you can implement immediately.
Seats are limited, register now to reserve your spot and prepare your data! https://lnkd.in/ekfqzxXX

Upcoming Webinar: How to Boost Your Bottom Line: Achieving Greater Profits with Automated Inventory Optimization

Intuition tells us that an inventory item with 65% gross margin, everything else being the same, should have a higher service level/safety stock than one with 10% for the sake of maximizing profit. However, traditional methods fail to quantify exactly how much the service levels/safety stocks should differ between these items. This causes companies millions of dollars in lost profits every year.

Our proprietary Safety Stock Price Model, developed by Dr. Jay Zhou, solves this issue. The model accurately calculates the ideal service levels and safety stocks based on your products' gross margins. For the above example, it prescribes service levels of 99% vs 92% and safety stocks of 282 vs 170 units for the 65% vs 10% margin items (see the picture below). By optimizing service levels and safety stock in this way, your company's profit is maximized - exactly what you and your executives want!

Join our free webinar tomorrow at 9am ET to learn how our algorithm can boost your bottom line through smarter inventory optimization. Dr. Zhou will explain why traditional methods fall short and how our patented approach is the true path to greater profits. Register now here for "How to Boost Your Bottom Line: Achieving Greater Profits with Automated Inventory Optimization" on Wednesday, November 1st at 9am ET

Upcoming Webinar on How to Boost Your Bottom Line: Achieving Greater Profits with Automated Inventory Optimization

Upcoming Webinar on How to Boost Your Bottom Line: Achieving Greater Profits with Automated Inventory Optimization -Why Traditional Methods Fall Short and How Our Algorithm is the True Path to Financial Success
Will be delivered by Dr. Jay Zhou on Wednesday, November 1st 2023 - 9:00 PM (EDT). Please register here

Safety Stock Cost Model by Friesian Analytics

Whether you're an online retailer, a brick-and-mortar store, a manufacturer, or any business that maintains inventory, determining the right service levels — which inform safety stock levels — can have a significant impact on your profitability. Traditional methods like ABC analysis may fall short in ensuring the most profitable outcomes for your inventory.

Enter Dr. Jay Zhou, founder of Friesian Analytics, who has pioneered the Safety Stock Cost Model. This approach considers all costs that influence the profitability of a specific inventory SKU. The ultimate goal? Identify the service level or safety stock at which total costs are minimized, maximizing profitability in turn. For a deeper dive into the Safety Stock Cost Model, watch the accompanying video where Dr. Zhou elucidates the model in a past webinar.

Interested in leveraging Dr. Zhou's groundbreaking concept for your inventory management? Subscribe to our online tool, PeakProfit, which is built upon this very idea. With our free plan, you'll get 20 assessments every month. Get started immediately with our user-friendly web application to maximize inventory profitability through tailored optimizations.

For deeper integration, our API enables directly calling the optimization engine from your existing apps and systems. Support for Python, JavaScript, R, and other languages facilitates seamless implementation with minimal coding. Need more? Inquire about our paid plans by emailing us. Don't miss out on optimizing your profitability!

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