inventory

What Is Inventory Turns or Inventory Turnover?

Inventory turnover refers to the number of times inventory has been sold or used then replaced in a specified amount of time. A higher inventory turnover rate means that a company's capital is being used and less capital is required due to the profit of inventory being sold. It also helps to maintain price stability since a company does not need to host sales in order to get rid of excess inventory. Instead, it allows for products to be sold at a steadier price.

Logistics GlossaryInsights
what is inventory turnsinventory turnoverinventory turnsinventoryinventory managementwhat is inventory turnover

What Are Inventory Buffers?

An inventory buffer is additional inventory kept on-hand in case of emergencies, transportation delays or surges in demand. Buffer inventory takes up additional space and can be costly, especially with inventory that has a shelf-life. However, benefits include protection against fluctuations in demand or the market, ensuring a stabilizing of company revenue and the avoidance of supply chain disruption.

Logistics GlossaryInsights
inventory buffersinventorylogistics glossarylogisticsglossarywhat are inventory buffers

What Are Inventory Days of Supply (for RM, WIP, PFG and FFG)?

Inventory days of supply refer to an efficiency ratio measuring the average amount of time in days that a company or warehouse holds inventory before selling or shipping it. These are utilized for raw materials (RM), work in process (WIP), partially finished goods (PFG) and fully finished goods (FFG). To calculate inventory days of supply, divide the average inventory by the cost of goods sold (COGS) in a day.

Logistics GlossaryInsights
inventoryinventory managementinventory days of supplylogistics glossarylogisticsglossarywhat are inventory days of supply

What Is Inventory?

Inventory refers to the products, materials or supplies stored inside a warehouse prior to production, shipping or selling. Inventory is an important part of making sales and generating a profit, and it should be managed efficiently to ensure an optimal supply chain.

Logistics GlossaryInsights
inventorylogistics glossarylogisticsglossarywhat is inventory