Optimal Purchase Volume Excel Calculator

This is an easy-to-use Optimal Purchase Calculator for working out your business's profit margins.

by Andrew Grigolyunovich, CFA, CFM, FMVA
Founder & CEO at The Financial Modeling World CupFollow 163

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Description
This is an Optimal Purchase Calculator, helping the user to work out maximum profit margins by calculating prices of bought and sold goods.

Ready-to-use, this Excel file is available to download instantly.

This MS Excel template contains a financial model used for comparing up to five purchase options of inventory with different purchasing conditions. The different purchasing conditions include:

- Number of item units bought: the number of items purchased for each of the options;

- Price per unit: the cost of one item given the aforementioned volume of each purchase;

- Total Transportation expenses: the total cost of transportation per each purchase;

- Customs duties: the cost of the customs duties payable per each purchase (if applicable);

- Deferred payment to the supplier: the number of days for which suppliers allow the payment for goods purchased to be deferred.


Furthermore, the model also takes into account the cost of money "frozen" in the inventory based on the company's required cost of capital and average monthly sales. The option with the final lowest price of one unit of inventory is presumed to be the most profitable option.

After you specify the aforementioned assumptions, the model will automatically indicate the most profitable option and highlight it in green.

Have any questions or would like to add some other purchasing conditions to the model? Start a discussion below, or private message via my Eloquens author channel!

This Best Practice includes
1 Excel model