Inventory Turns (Inventory Turnover): The number of times
that your inventory cycles or turns over per year. It is one of the most
commonly used Supply Chain Metrics.
frequently used method is to divide the Annual Cost of Sales by the Average
Example: Cost of Sales = $36,000,000. Average Inventory = $6,000,000.
$36,000,000 / $6,000,000 = 6 Inventory Turns
Inventory Turns can be a moving number.
Example: Rolling 12 Month Cost of Sales = $16,000,000. Current Inventory =
/ $4,000,000 = 4 Inventory Turns
Turns: Divide the "Total Cost of 12 Month Sales Plan" by the
"Total Cost of Goal Inventory"
Example: The Total Cost of 12 Month Sales Plan is $40,000,000. Total Cost of
Goal Inventory = $8,000,000
/ $8,000,000 = 5 Projected Turns