AverageInventory
AverageInventory refers to a key performance metric used primarily in retail, supply chain management, and inventory analysis to measure the average stock level held over a specific period. This metric helps businesses assess their inventory efficiency, turnover rates, and overall operational health. By calculating the average inventory, companies can better align their stock levels with demand, reduce holding costs, and minimize the risk of stockouts or overstocking.
The formula for AverageInventory is straightforward: it involves summing the beginning inventory and ending inventory for
AverageInventory is often paired with metrics like Cost of Goods Sold (COGS) to calculate the Inventory Turnover
While AverageInventory is a useful tool, it should be interpreted alongside other financial and operational data.