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Supplier quote comparison
Compare two supplier offers on the same purchase quantity and cost basis.
ProcurementPROCUREMENT
Quantity Discount & Annual Inventory Cost Calculator
Compare two recurring order-size scenarios to see whether an all-units discount offsets extra cycle-stock carrying cost.
Quantity discount analysis calculator
Compare two recurring order-size scenarios to see whether an all-units discount offsets extra cycle-stock carrying cost.
YOUR RESULT LIVE CALCULATION
Savings with discount scenario
$4,500/ year
TWO ALL-UNITS SCENARIOS- Regular annual purchase cost
- $240,000
- Discount annual purchase cost
- $235,200
- Regular ordering / holding
- $1,800 / $1,250
- Discount ordering / holding
- $900 / $2,450
- Regular / discount annual total
- $243,050 / $238,550
Long-run annual average, not a cash budget or optimized order policy. Positive savings favor the discount scenario.
BEHIND THE NUMBER
How the calculation works
The regular order must be below the entered break; the discount order must meet it. The discount applies to every unit in the qualifying order, not only units above the break. Both scenarios assume stable repeating demand, immediate replenishment, no shortages, and average cycle stock of Q/2. Annual order counts are long-run averages and are not rounded up.
Annual cost = D x price + (D / Q) x order cost + (Q / 2) x price x carrying rate / 100
When this calculation helps
A price break changes purchase value and can also change average cycle stock and holding cost. Compare the full modeled annual cost at feasible quantities rather than ranking only the supplier unit prices.
Check the interpretation
The result assumes the entered demand and cost structure. A favorable break can still create expiry, storage, cash, or obsolescence exposure. Confirm minimums, order multiples, and the exact discount basis before making a purchasing commitment.
This compares two entered scenarios, not every price tier or an optimized quantity. It excludes safety stock, freight changes, expiry, financing cash flows, storage limits, and taxes. An order larger than annual demand describes a multi-year replenishment cycle, not a one-year cash budget.
MIT inventory and EOQ modelsGood to know
Is a lower unit price always cheaper?
No. Larger orders hold more cycle stock. Compare annual purchase, ordering, and carrying costs together, then review costs and risks outside this simplified model.
Is this an incremental discount calculator?
No. It models one all-units price break. Incremental discounts apply different prices to blocks of units and require a different purchase-cost calculation.