Inventory and Average

Average Inventory

Average inventory is the exact midpoint of beginning and ending inventory.

highlighted = computed this step

Average inventory

Average inventory is the midpoint of beginning and ending inventory.

average inventory=(beginning+ending)/2\text{average inventory}=(\text{beginning}+\text{ending})/2
Inventory turnsThe chart recomputes average inventory, turns, days of supply, and the what-if.inventory turnsturns 4; days of supply 90averageaverage 50annual usageannual usage 200what-if avgwhat-if avg 40measurevaluemeaningbeginning inventory40period startending inventory60period endaverage inventory50simple averageturns4usage / averagedays of supply90days / turnswhat-if days72lower averagedeterministic inventory ratio arithmetic only

Average value

Average inventory is 50.

(40+60)/2=50(40 + 60) / 2 = 50
Inventory turnsThe chart recomputes average inventory, turns, days of supply, and the what-if.inventory turnsturns 4; days of supply 90averageaverage 50annual usageannual usage 200what-if avgwhat-if avg 40measurevaluemeaningbeginning inventory40period startending inventory60period endaverage inventory50simple averageturns4usage / averagedays of supply90days / turnswhat-if days72lower averagedeterministic inventory ratio arithmetic only