Formulas, metrics, and core concepts for managing stock: reorder points, safety stock, turnover, valuation, and more.
The reorder point formula in plain English. Work out exactly when to restock so you stop running out of stock and stop tying up cash in overbuying.
The safety stock formula, explained with worked examples: service levels, Z-scores, and how to size a buffer when demand and lead time both vary.
Economic order quantity (EOQ) tells you the exact order size that minimizes total inventory cost. Here's the formula, a worked example, and where it breaks.
The inventory turnover ratio formula in plain English, with a worked example, industry benchmarks, and the fastest ways to fix a number that's dragging.
Days inventory outstanding (DIO) shows how long stock sits before selling. Get the formula, a worked example, industry benchmarks, and ways to lower it.
GMROI (gross margin return on inventory) shows how many margin dollars each dollar of stock earns. Here's the formula, a worked example, and what good looks like.
Sell-through rate tells you how fast stock actually sells. Get the formula, a worked example, real benchmarks, and how to act on the number.
Inventory carrying cost is what it really costs to hold stock. Here's the formula, a worked example, and practical ways to bring the number down.
Order fill rate measures how many orders you ship complete on the first try. Here's the formula, a worked example, and practical ways to raise it.
Inventory record accuracy is the KPI that decides if your stock data is trustworthy. Here is the formula, real benchmarks, and a step plan to raise it.
Weeks of supply tells you how long your stock will last at your current sales rate. Here's the formula, a worked example, and how to set targets that fit your lead times.
ABC analysis for inventory sorts SKUs by annual value so you focus control on the vital few. Here's the formula, a worked example, and how to run it.