ROPROQ SaaS
ROPROQ Calculator is a SaaS version of our optimization software – available online via any internet browser, with no special setup required on your side.
The Calculator provides an optimized inventory management strategy (reorder point and reorder quantity) for each item and location. To begin, simply enter the initial data and click the "Calculate" button.
About the input data
- Purchase price – The price per unit, including all associated costs (customs, fees, delivery, inspections, etc.) incurred before the item is received and ownership is transferred to your facility.
- Selling price – The average price per unit paid by customers during the selected period, based on actual invoiced transactions.
- Replenishment cost – The cost associated with placing a single order, including order processing, goods receiving, and any other costs tied to each new line item in a supply document. To estimate this accurately, you can divide the total SG&A budget by the number of line items in all processed purchase orders over the selected period."
- Average cost of capital rate – The average rate a company pays for its source of financing, or the return expected by shareholders, used to estimate the cost of capital tied up in inventory.
- Supplier payment terms – The time between the delivery of goods and the contractual due date for payment to the supplier. The default value is 30 days; valid inputs range from 0 to 365.
- Customer payment terms – The time period granted to your customers to pay for delivered or purchased goods. The default value is 0 days (typical for retail operations). Valid input range: 0 to 365 days.
- Actual demand – The average daily sales estimated from historical data, calculated only for days without stock-outs, pcs per day. Valid input range: 0 to 100,000.
- Demand quantity distribution represents the share of total sales (by value) attributed to transactions of a specific quantity during a given period (e.g., one month). For example, if mineral water is mostly sold by the bottle, the row might read: “1 – 100%”. If some customers purchase it by the box and those transactions make up about two-thirds of total sales, the row could read: “1 – 33%, 20 – 66%”.
- Delivery lead time - The total time that elapses between placing an order and the goods being delivered and available for sale. Range of valid inputs from 0 to 365
- "Calculate" button – This button runs the Optimizer to compute the optimal reorder point and reorder quantity, along with the key performance indicators (KPIs) to be used for planning.
- "Logistics curve" button – This button becomes active only after the optimal ROP and ROQ have been calculated. When clicked, it displays the stock quantity curve (logistics curve) over five reorder cycles.
- "Cost surface" button – This button becomes active only after the optimized reorder point (ROP) and reorder quantity (ROQ) have been calculated. On the new screen, the user can first adjust the tabulation step sizes for ROP, ROQ, and total cost (along the corresponding axes). Upon clicking the "Draw Chart" button, a 3D surface plot of the total cost function (or profit function) appears, based on the two variables: ROP and ROQ. The optimum point is marked on the surface, representing the minimum total variable cost (or, equivalently, the maximum profit).
- «Compare with the alternative parameters» check-box
The Calculator allows (besides finding an optimal ROP/ROQ combination) to calculate the KPI for any alternative combination of reorder point and reorder quantity and compare them with optimal indicators. To calculate the alternative, tick the checkbox Compare with alternative parameters and specify Threshold (ROP) and Order value (ROQ). The comparison of calculations is displayed in the table Payroll result. Worsening indicators are highlighted in red and the improving ones are highlighted in orange in the column of Alternative indicators. - "Compare with custom ROP/ROQ" checkbox – This checkbox allows KPI calculations for any alternative combination of reorder point (ROP) and reorder quantity (ROQ), enabling a comparison with the optimal KPI values. To perform the comparison, tick the checkbox and enter the desired values for threshold (ROP) and order value (ROQ). The results will be shown in the second column of the "Replenishment plans" table. In the "Custom" column, worsening indicators are highlighted in red, while improving ones are highlighted in orange.
The "Optimum" column displays the optimal ROP–ROQ pair that yields the best KPI values based on the provided input parameters. The "Custom" column shows the indicators for an alternative ROP–ROQ pair specified by the user. The rows of the table list the following indicators for both replenishment plans:
- Reorder point (ROP) – The inventory level (pcs) at which a new order is triggered.
- Reorder quantity (ROQ) – The quantity of the item (pcs) ordered when the reorder point is reached.
- Reorder cycle, days – The time between consecutive orders.
- Service level, % – The percentage of demand expected to be fulfilled without stock-outs.
- Inventory, days – The planned average inventory expressed in days of sales.
- Total daily costs per day – The combined daily cost of stock-outs, holding, and replenishment.
- Stock-out cost per day – Lost gross profit due to unmet demand.
- Holding cost per day – Costs incurred for holding the item in inventory due to cost of capital used for it.
- Replenishment costs – Costs associated with ordering and receiving the item.
- Profit per day – Maximum possible gross profit assuming 100% demand satisfaction.
- Stock-out quantity – Planned volume of unmet demand.
- Ave. stock level, pcs – The forecasted average stock level.
- Ave. inventory value – The planned average inventory value, based on purchase price.
- Maximum, pcs – The maximum quantity of the item in stock on the day of delivery.