Logistics & Supply Chain

Basic

Inventory Turnover

How many times inventory is sold and replaced in a period.

Formula

T = \frac{COGS}{\bar{I}}

Variables

TTurnover ratio

COGSCost of goods sold

\bar{I}Average inventory value

Example

COGS=$1.2M, avg $200k: T = 6

Did You Know?

Grocery chains turn perishable stock over 15+ times a year; furniture stores may manage only 3-4.

logistics turnover inventory

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More in Logistics & Supply Chain

Economic Order Quantity

Order size that minimises the combined cost of ordering and holding stock.

Reorder Point

Stock level that triggers a new order, covering demand during the lead time.

Safety Stock

Buffer inventory that absorbs demand variability during lead time.

Days Inventory Outstanding

Average number of days stock sits before being sold.

Little's Law

Average items in a system equals arrival rate times average time in the system.

Cycle Stock

Average working inventory between deliveries, half the order quantity.