Data-driven decisions start here. Use our interactive calculators to measure your safety stock, inventory turnover, OTIF, and more. Understand your metrics to boost profitability and reduce excess stock.
The extra buffer inventory kept on hand to mitigate the risk of stockouts caused by inaccurate forecasts or supplier delays.
A ratio showing how many times a company has sold and replaced inventory during a given period. High turnover indicates strong sales or effective purchasing.
The average number of days that a company holds its inventory before selling it. Lower DIO means capital is tied up for a shorter period.
Measures supply chain delivery performance. It tracks whether expected product was delivered completely and precisely at the scheduled time.
An inventory categorization technique based on the Pareto Principle (80/20 rule), classifying items into A (highly valuable), B (moderate), and C (least valuable).
Gross Margin Return on Investment evaluates inventory profitability, showing how much gross profit is earned for every dollar invested in inventory.
Determine the optimal buffer stock to prevent stockouts.
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Quick answers regarding inventory KPIs and formulas.
The standard safety stock formula is: (Maximum Daily Sales × Maximum Lead Time) – (Average Daily Sales × Average Lead Time). This ensures you have enough buffer inventory to handle unexpected spikes in demand or supply chain delays.
A good inventory turnover ratio generally falls between 4 and 6 for most retail and manufacturing businesses. This indicates that a company is restocking items efficiently without overstocking. However, this varies heavily by industry.
OTIF stands for On-Time In-Full. It is a key performance indicator that measures a supplier’s ability to deliver the expected product in full at the expected time. It is calculated as (Number of OTIF Orders / Total Orders) × 100.
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