**Marginal Value** relates to how much of something we have.

Generally speaking the **Marginal Value** for an item decreases as the quantity of items that we have increases.

# Examples

## Cookie

For example suppose you are starving and someone gives you one cookie. That cookie has immense **Marginal Value** to you.

Now suppose they give 1 more. That one also has a great deal of **Marginal Value**, but not as much as the first one, because you are somewhat satisfied.

Now suppose they give you 1000 more cookies. You eat 100 and canâ€™t eat any more. The remaining cookies have zero **Marginal Value** to you.

## Service Parts

We sell high precision Robotic Gears with `purchase cost`

**$400,000** and `sales price`

**$700,000**.

We expect to see `7`

of these, plus or minus `4`

annually.

Suppose on average we always carry `10`

units. The `average inventory level`

is `10`

units.

We end up only selling `3`

each year. The remaining `7`

units that we carried had zero **Marginal Value**.

They only added `marginal cost`

, because the `cost of capital`

for these items is high.