Distribution Inventory Frequency Calculator

SKU & Segment Setup

SKU / product description

Product category (auto-fills defaults)

WAC cost per unit ($) Wholesale acquisition cost to distributor

Sell price per unit ($) Invoice price to customer (hospital/pharmacy)

Units moved per day (DC) Pick/ship volume per distribution center

Weekly inventory replenishment ($) Cost to restock DC from manufacturer

Distribution centers in network

Customers (hospitals/pharmacies) served

Distribution Risk Parameters

Manufacturer lead time (days) Time from PO to DC receipt

Safety stock on hand (days)

Shrinkage / pick error rate (%) Mis-picks + damage + undocumented loss. Avg DC: 1-3%

Expiry / returns rate (%) Annual short-dated + customer returns

Backorder / stockout fill rate loss (%) Revenue lost to competitor fill during backorder

Emergency procurement premium (%) Spot purchase over contracted WAC

SLA penalty per stockout event ($) Contract penalty or credit per missed service level

Stockout events per year (per DC)

Inventory accuracy target (%) World class DC: 99%+. Avg: 95-98%

Current inventory accuracy (%)

Counting Labor Cost

Labor rate ($/hr) Warehouse / cycle count associate

Time to count this SKU (min) Locate + count + scan + reconcile

Controlled Substance Setup

Drug / DEA schedule description

DEA Schedule / category (auto-fills defaults)

WAC cost per unit ($)

Sell price per unit ($)

Units moved per day (vault)

Weekly replenishment cost ($)

Vault / DC locations in network

DEA audit frequency (per year)

Regulatory & Diversion Risk

Manufacturer lead time (days)

Safety stock on hand (days)

Diversion / unaccounted loss rate (%) Even small percentages trigger DEA investigation thresholds

DEA violation fine (per finding) ($) Civil penalty per chargeable violation. Criminal exposure is separate.

SLA / backorder penalty ($)

Emergency procurement premium (%)

Stockout events / year (per location)

Recordkeeping discrepancy rate (%) 222 form / CSOS transaction errors found on audit

Counting Labor Cost

Labor rate ($/hr) Controlled substance vault associate

Time to count this item (min) Count + dual-witness reconcile + DEA recordkeeping

Cold Chain Product Setup

Product description

Product category (auto-fills defaults)

WAC cost per unit ($)

Sell price per unit ($)

Units moved per day (DC)

Weekly replenishment cost ($)

Distribution centers in network

Cold storage capacity (% utilized) Higher utilization amplifies stockout risk

Cold Chain Risk Parameters

Manufacturer lead time (days) Biologics: longer lead times are common

Safety stock on hand (days)

Temperature excursion loss rate (%) % inventory lost to cold chain failures annually

Expiry / short-date write-off rate (%) Higher for biologics due to short shelf life

Emergency procurement premium (%)

SLA / backorder penalty ($) Per event — biologics carry highest SLA exposure

Stockout events / year (per DC)

Lot/lot recall risk (% inventory at risk) Portion of inventory subject to lot traceability gap

Counting Labor Cost

Labor rate ($/hr) Cold chain inventory specialist

Time to count this SKU (min) Count + lot verification + temp log check + DSCSA compliance

Counting Frequency — Compare Two Scenarios

Scenario A — Frequent

More frequent counting

Tighter cycle count intervals

Scenario B — Infrequent

Less frequent counting

Longer reconciliation gap

Per-Stockout Cost — Scenario A vs. B

Scenario A

Daily counting

Avg lag: 0.5 days

Scenario B

Weekly counting

Avg lag: 3.5 days

Annual P&L Impact — — events/yr, — DCs

Annual cost
Scenario B

—

Annual cost
Scenario A

—

Gross annual
savings

—

Net savings
(after labor)

—

Scenario B — total annual cost—

Scenario A — cost (losses + extra labor)—

Net annual savings—

Inventory Accuracy & SLA Exposure

Counting Labor ROI

Annual labor
Scenario A

—

Annual labor
Scenario B

—

Payback period

—

Blind Window Risk Assessment

Cost Breakdown — Scenario A vs. B

Distribution Operations Insights