Inventory and Waste Cost Simulator

Simulator

Enter the current state and Lean target

Core logic: Annual holding cost = inventory value x carrying-cost rate

Current inventory (units)

Average unit cost

Holding cost (%)

Annual throughput (units)

Current lead time (days)

Workdays per year

Lean improvement scenario

Target inventory reduction (%)

Target lead-time reduction (%)

Batch size reduction (%)

Pull-system waste reduction (%)

Kanban recommendation inputs

Container quantity

Demand variability (CV %)

Replenishment lead time (days)

Safety / service factor

Results

Inventory economics

Inventory Value: $456,000
Annual Holding Cost: $82,080
Throughput / Day: 720
Potential Lean Savings: $31,709
Lead-Time Savings: $20,520
Inventory Savings: $24,624
Recommended Kanban: 65 cards
Kanban Stock: 2,600 units
Days of Inventory: 16.7 days

Interpretation

Current inventory is tying up meaningful annual holding cost, and the Lean scenario shows a strong recurring savings opportunity.

Best opportunity: reducing inventory directly creates the largest annual savings in this scenario.

Kanban note: variability and replenishment lead time are the main drivers of the recommended card count.

Pull-system note: the pull improvement factor is modeled as a waste-reduction uplift on the remaining holding-cost burden after inventory and lead-time reductions.

Breakdown

Savings scenario

Source	Amount	Share
Inventory reduction	$24,624	46.2%

Kanban

Recommendation detail

Kanban formula: daily demand x replenishment lead time + safety stock, all divided by container quantity.

Safety stock factor: demand variability and the chosen service factor drive the protection level.

Lean target inventory after reduction: 8,400 units

Instructions

How to use this app

Enter current inventory, unit cost, annual throughput, holding-cost rate, and current lead time.
Set the Lean scenario reductions for inventory, lead time, batch size, and pull-system waste improvement.
Click `Simulate` to calculate annual holding cost and projected recurring Lean savings.
Enter container quantity, demand variability, replenishment lead time, and service factor to generate a Kanban recommendation.
Use the outputs together: annual holding cost frames today’s waste, while the savings and Kanban guidance show how a pull-based future state could change it.

The Kanban card count is directional. If you have strong seasonality, highly variable supplier performance, or mixed-model replenishment, you should validate the recommendation against real replenishment history.

Batch-size and pull gains are modeled as additional recurring savings levers layered on top of direct inventory and lead-time improvements. Adjust them conservatively when you are early in the project.