Run the Numbers

CHRY "INVENTORY REFRESH" PROGRAM

 
$   Purchase from Chrysler
$   Obsolescence you trade in
   
 
$ Net on-hand cost after trading obsolescence for 3 times the amount of non-stocking parts from Chrysler
$ Estimated % you can sell in 12 months
$ Estimated $$ you can sell in 12 months
$ Total investment in non stocking inventory that you have to hold for 12 months
 
 
$ Average Holding Cost = 30%*
$ Total dollar amount of Holding costs
$ Revenue lost based on investing in non-moving parts instead of parts you sell 30 TIMES PER YEAR
Total dealership opportunity revenue lost
Total dealership opportunity profit lost (based on 28.6% average GP industry margin)

 
* Calculations based on figures from Mike Nicholes “Professional Inventory Management” (2005)


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