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Inventory Turns (Inventory Turnover): The number of times that a companies inventory cycles or turns over per year.

Calculation: A frequently used method is to divide the Annual Cost of Sales by the Average Inventory Level.
Example: Cost of Sales = $36,000,000. Average Inventory = $6,000,000.
             $36,000,000 / $6,000,000 = 6 Inventory Turns

OR Inventory Turns can be a moving number.
Example: Rolling 12 Month Cost of Sales = $16,000,000. Current Inventory = $4,000,000
            $16,000,000 / $4,000,000 = 4 Turns 

Projected Inventory 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
            $40,000,000 / $8,000,000 = 5 Projected Turns

 Although results vary by industry, typical manufacturing companies may have 6 turns per year. High volume/low margin companies (like grocery stores) may have 12 turns per year or more.

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For information on Inventory Turns, Fill Rate Measurement, Backorder Reporting or any other Supply Chain Metric, click on the links to the left. The text that appears on this website is the opinion of the webmaster. Metrics may or may not be uniform across all industries. All data listed here may be used as a general guide, but it's accuracy is not guaranteed. Please consult a qualified Supply Chain professional for more details on Supply Chain Measurements.  Other Supply Chain Websites
This site is owned and maintained by Michelle Taras & John Taras CPIM, PMP

VendorManagedInventory.com -  information on Vendor Managed Inventory
InventoryTurns.com - additional information on how to calculate inventory turns or inventory turnover.
SupplyChainManagementNews.com - News stories about Supply Chain Management
SupplyChainDefinitions.com - various definitions of supply chain terms
SupplyChian.com - various supply chain info (yes, i know it's mis-spelled)
SupplyChainPurchasing - a new site Michelle is developing. All about Supply Chain Purchasing.

other...
DangerousTricks.com - my 14 year old son is working on his first website. The site has video's of people doing extreme stunts.