How to plan a £750,000 purchasing budget across 4,000 products
Every inventory tool on the market will happily tell you what each product "needs". Almost none of them answer the question your purchasing team actually faces every month: "Finance has given us £750,000. What's the best possible way to spend it?" Those are profoundly different problems — and the gap between them is where mid-market businesses quietly lose money.
Why "what does each product need?" isn't the real question
Add up the textbook reorder suggestions across 4,000 products and you'll get a number — say £1.1 million. Your budget is £750,000. Now what? The tool has no answer. So the team falls back on what everyone falls back on:
- Cut everything pro-rata — trim every line by a third. Sounds fair; it's terrible. The product about to stock out and cost you £40,000 in lost sales gets the same haircut as the one with four months of cover.
- Order down the list until the money runs out — better, if the list is ranked well. It almost never is, because ranking 4,000 products by what a stockout would genuinely cost is exactly the hard part.
- Let the loudest voice win — the sales manager who shouts about their line gets stock; the quiet SKU that actually funds the payroll doesn't.
What makes the real problem genuinely hard
Spending a fixed budget optimally across thousands of products is a mathematician's nightmare, for three compounding reasons:
1. Urgency isn't the same as emptiness
The right measure of urgency is what running out would cost: how much daily revenue is at risk, how long the exposure lasts before the next delivery could land, and how critical the product is to customers who buy other things with it. A slow line at zero stock can matter far less than a best seller at 40% — the ranking has to be built from expected cost, not shelf level.
2. MOQs turn it into an all-or-nothing puzzle
You can't order 38 units when the supplier's minimum is 500. Every product is an all-or-nothing (or multiples-only) decision, and one big MOQ eats the budget that could have covered twenty small urgent lines. Worse: some small-but-vital products have MOQs so chunky that unless money is deliberately reserved for them up front, the "obvious" spending order starves them every single time. Getting this right across a whole catalogue is a genuinely hard combinatorial problem — it cannot be eyeballed.
3. The budget moves
Finance calls: it's £600,000 now. Or a container lands early and frees up cash. Every change re-shuffles the entire answer — and if re-planning takes your team two days in a spreadsheet, you'll be placing orders against a plan that was wrong before it was signed off.
The pro-rata haircut feels fair and is quietly one of the most expensive habits in mid-market purchasing: it protects your calmest products at the expense of your most urgent ones.
What good looks like
A proper budget-first plan does four things, in order:
- Scores every product by the true cost of running out — revenue at risk × days of exposure × how critical the line is. That's the ranking that decides who gets money first.
- Reserves cash for the MOQ cliff-edges — the small-but-vital lines whose chunky minimums would otherwise always lose to smoother spenders.
- Spends to the penny, in valid quantities only — every order zero or a proper MOQ multiple, so the plan that comes out is a plan you can actually place with real suppliers.
- Re-plans instantly when the number changes — £750k to £600k should be a slider, not a two-day rebuild.
This is the problem Optimal Chain's budget planner was built for: give it the budget, and it produces the order plan — most urgent revenue protected first, every supplier's MOQ respected, per-supplier breakdown included, re-planned in moments when you change the number. We haven't found another tool in this bracket that plans from the budget backwards, which is why we lead with it.
What you can do this week (even in Excel)
- Rank by cost-of-stockout, not by gap. Even a rough daily-revenue × days-until-empty column beats "order whatever looks lowest".
- List your MOQ cliff-edges — products where the minimum order is more than a month of budget share. These need money reserved deliberately, not whatever's left.
- Stop the pro-rata haircut. If the budget forces cuts, cut whole lines from the bottom of the urgency ranking — don't shave the top.
- Sense-check with turnover. Our free inventory turnover calculator shows how hard your stock is working overall — a falling ratio means the budget conversation is about to get harder.
See your own budget planned properly
Send us a sales export — any system, Excel included — and the free blueprint shows your catalogue diagnosed: forecasts, urgency, coverage and the £ tied up where it shouldn't be. Then give the budget planner your real number and watch it spend it. Plans from £199/month — the full price list is published.