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Cost of Capital in Inventory Decisions: An Executive Framework

Cost of Capital in Inventory Decisions: An Executive Framework

A framework for senior executives to bring the real cost of capital into inventory-level decisions, beyond purely operational metrics like fill rate.

What's Inside
  • Why operational metrics alone ignore the cost of capital
  • A method for building the cost-of-capital rate into the safety-stock formula
  • A decision model for an annual inventory portfolio review