Smaller, more frequent deliveries will drive up delivery costs but keep inventory levels low, while larger, less frequent deliveries will keep delivery costs low but push inventory levels up, driving up carrying costs. The optimum delivery schedule is the one that minimizes total inventory costs: delivery costs plus carrying costs.

On the upper plot, carrying cost (blue), delivery cost (purple), and total inventory cost (gold) are plotted against the number of annual deliveries, with the optimum schedule marked with a vertical red segment if "show minimum" is checked. The vertical black segment is controlled by the "annual deliveries" slider. The lower plot shows the size of inventory over time based on the schedule determined by the "annual deliveries" slider. In this simple model, each delivery causes a spike in inventory, which declines gradually (the model assumes a constant sales rate) to zero, at which point the next delivery arrives.