Mansfield Plumbing Products is committed to helping your business be profitable. This GMROI Calculator helps illustrate how Mansfield’s consistent availability allows you to keep lower inventory and get a better return on your inventory investment!
GMROI stands for Gross Margin Return On Investment. It is a metric used to manage inventory as one would manage an entire business – the goal is earning the highest possible return per dollar of inventory investment.
GMROI answers the question… “For every dollar carried in inventory, how much is earned in gross profit?”
A higher GMROI indicates a better balance of:
- Sales
- Margin
- Inventory Investment
The key is a balance:
- Enough inventory to not have stock outs, lost sales
- Low enough to not tie up cash
Shorter lead times and consistent availability from vendors means inventory can be kept low and still not miss sales. More inventory turns is more cash in pocket.
| MPP | Competitor Sourced Product | |||||
|---|---|---|---|---|---|---|
| Selling Price | $ | $ | ||||
| Cost | $ | $ | ||||
| Annual Volume | ||||||
| Order Lead Time (weeks) | ||||||
| Gross Profit | ||||||
| Annual Gross Profit | ||||||
| Average Inventory Requirements (Weeks) | ||||||
| Average Inventory Investment | ||||||
| GMROI | ||||||