US Patent 8650062 Automated replenishment using an economic profit quantity

Prior art methods base inventory management on maximizing cost. The present invention shifts the focus to maximizing economic profit, taking income tax into account. Systems and methods are provided for digitally calculating an economic profit quantity that maximizes economic profit, defined as the excess of net operating income over capital charge, as well as the corresponding values of economic profit and recommended safety stock. Methods are provided for utilizing the economic profit quantity and associated recommended safety stock quantity for automatically placing orders, for choosing among suppliers, and for calculating space requirements.