Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Average Inventory = (Sum of All Inventory Values) / Number of Periods
Your Average Inventory Result
$0
Tips from the Guide:
• Use this average to avoid extra stock and stockouts
• Combine with Inventory Turnover Ratio: ITR = Cost of Goods Sold / Average Inventory
• For seasonal patterns, use multi-period calculations to spot trends
• Track frequently (e.g., monthly) for sharper insights and better decisions
• Consider Economic Order Quantity (EOQ) to optimize ordering based on your average