Consignment stock with a third party


New member

Imagine the following;
Suppliers in Italy with customer in Sweden(me). Long leadtimes lead to a high in-stock value.
More frequent deliveries? - Too expensive and not environmental friendly.
Soloution? - Consignment stock --> stock restrain for in-house soloution --> External CS with a third party.

The third part soloution creates a lot of problems that I can't seem to solve, the main problem being:

The buyer has to pay for the stockholding cost, a cost that is based in rent/pallet-location.
So I need to find a way that identifies wich articles are highfrequent enough to pay off their stock-holding cost.
At the same time I need to calculate the delivery-frequency from Italy to the CS. Lets say the "break even" between stockholding cost and transportation cost.
I find this really hard to explain, but imagine the "break-even" cost for all factors that affect the size of the CS.
  • Number of articles (usage frequency/unit cost/stockholding-cost)
  • Number of delivieries
  • CS size considering the above.
I hope I've made myself clear enough for you to understand my problem..

​​​​​​​Thank you!


From what I understand in your premise, the stocks would be delivered to Sweden which is the destination country. But such stocks are not ordered yet so it has to be stored somewhere there. And when a buyer orders the product, there will be a mark-up to compensate for the cost of storage. The advantage is to shorten the lead time when ordering. I don’t think it is very practical. What if the buyer stopped ordering? You will be left with the cost of storage and the product as well.