Saturday, October 20, 2012

Inventory Calculation

Hi all, how are you?
In the previous discussion, we discussed about Inventory right?
So, let we discuss about inventory calculation simply guys. Basically, the inventory is available caused by fluctuates demand. That's why, we should calculation and determine the inventory calculation.
Before we calculation the inventory, we should know the historical data of demand or consumptions.
Historical data can be found in every company data record. Usually, it showed by monthly or weekly consumption.
If our historical data showed in monthly, we should convert it in days.
ADU (Average Daily Usage) = AMU (Average Monthly Usage) / Work Days
Let say in these example, we use 20 work days.

Ex:        Month1 Month2 Month3           ==>      AMU                        ==>         ADU
               150       200       120                (150+200+120)/3  = 157             157/20 = 7.85

After we calculate the average daily usage, now we could determine the inventory should be stocked in our warehouse. The inventory calculation can be determined by days of inventory we want.
For example, we want our inventory can cover 3 days production:

Inventory (Qty) = 3 (days) x 7,85 (Qty/days)
Inventory (Qty) = 23.55 Qty

Therefore the company will build inventory minimum for 3 days coverages.

Created by: Eka Angga Riandhika

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