Earle M. Jorgensen Company ® - Products - worksheet

By: Earle M Jorgensen Canada  09-12-2011

Warehousing your own inventory can add up to 41% a year to the purchase price of materials.

To find out how much extra you may be paying, fill in the box below with the average value of your inventory. Then talk to an EMJ representative about how much you could save by ordering just what you need, when you need it. Click to find your nearest emj representative.
Inventory Value

To house your inventory, you must pay for such things as racks, equipment to move it, maintainance, depreciations, lighting and heating.
Additional Costs: 3.6% - 9.0%
Building Depreciation (2.4%)$0
Operating Costs (3.0%)$0
Taxes (0.8%)$0
Insurance (0.6%)$0
Total Costs (6.8%)$0

Whether you borrow from the bank, or pay out of cash flow, you must pay for more than just the cost of materials. There are also taxes and insurance on the inventory, and you run the risk of material becoming obsolete.
Additional Costs: 6.6% - 16.5%
Material Costs (9.0%)$0
Inventory Taxes (0.6%)$0
Inventory Insurance (0.6%)$0
Material Obsolescence (1.5%)$0
Total Costs (11.7%)$0

It's likely you must process the materials before they're ready for production. That takes saws and possibly other special equipment.
Additional Costs: 1.3% - 3.3%
Preproduction Processing Equipment Depreciation (0.6%)$0
Material Handling Equipment Depreciation (0.4%)$0
Electrical Power and Special Supplies (1.0%)$0
Servicing and Repair (0.5%)$0
Total Costs (2.5%)$0

When materials end up in your scrap bin it really costs you. Even if you sell to a scrap dealer, you only realize a small fraction of the actual purchase price.
Additional Costs: 4.5% - 11.2%
Average Scrap Cost (8.5%)$0
Total Costs (8.5%)$0

To warehouse your own inventory, you must have people to receive and store it, people to operate fork lifts and preprocessing equipment, people to collect scrap, and clerical personnel to plan, track and monitor the inventory.
Additional Costs: 5.8% - 14.5%
Receiving & Stocking Labor (2.0%)$0
Moving Labor (2.4%)$0
Preproduction Labor (7.9%)$0
Total Costs (12.3%)$0
The information in this article was current at 06 Dec 2011

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Earle M. Jorgensen Company ® - Products - stocklist

EMJ, with headquarters in Lynwood, is one of the largest independent distributors of metal products in North America with 37 service and processing centers. Select material group from the left.


Earle M. Jorgensen Company

We continue to expand our investment in the highest quality metals available and in the equipment and technology that enable us to deliver the highest quality service available because we recognize the truth in our founder's words that "Only customers pay our wages!.