Home Free Tools Inventory Savings Calculator — Calculate How Much Better Inventory Management Saves
Growth Tool — Inventory Savings Calculator

Inventory Savings Calculator — Calculate How Much Better Inventory Management Saves

Quantify your current inventory losses from dead stock, shrinkage, overstocking, and stockouts — then estimate the savings from improving inventory management.

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Formula & How It Works

Total Inventory Loss = Dead Stock + Shrinkage + Overstocking Cost + Stockout Loss
Annual Saving = Total Loss × Improvement % ÷ 100

Worked Example

Scenario: Dead stock ₹5L, Shrinkage ₹2L, Overstock ₹1.5L, Stockouts ₹3L = ₹11.5L/year. 35% improvement → ₹4L annual saving

When to Use This Calculator

  • Build ROI case for inventory management system
  • Justify ERP investment to management
  • Calculate working capital improvement from stock optimisation
  • Set inventory reduction targets for buying team
  • Quantify cost of poor inventory management

Frequently Asked Questions

By reducing dead stock, shrinkage, overstocking (excess holding cost), and stockouts (lost sales). Each of these has a quantifiable cost.
Businesses using inventory management software typically reduce dead stock by 20–30%, shrinkage by 40–60%, and holding cost by 15–25%.
Add: Dead stock value + Annual shrinkage + Stockout-related lost sales + Excess holding cost (interest on over-stocked inventory).
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