**Optimal Stocking Level** for capital intensive **service parts** is the `stocking level`

at which if we were to stock one more unit the `marginal cost`

of that unit would exceed the `marginal profit`

expected from a sale of the unit.

# Example

We are stocking Caterpillar Bulldozer belts and we have determined that the `marginal profit`

gained from moving from a `stocking level`

of `8`

belts to `9`

belts is `$3000`

.

However the `inventory`

and `operation cost`

of doing so will be `$3300`

, thus the `cost`

is greater than the `profit`

.

The **Optimal Stocking Level** is `8`

units.