How to Calculate Inventory Turnover Rate
What is Inventory Turnover Rate?
Inventory Turnover Rate Calculator helps logistics and supply chain professionals optimize operations and reduce costs.
Formula
Turns = COGS / Average Inventory Value
Step-by-Step Guide
- 1Divide annual COGS by average inventory held
- 2Apply the formula with your specific values
- 3Use the result to optimize operations or costs
Worked Examples
Input
$500,000 COGS, $100,000 avg inventory
Result
Turns = 500000/100000 = 5 turns/year
Common Mistakes to Avoid
- ✕Using incorrect units or dimensions in the calculation
- ✕Ignoring surcharges and accessorial fees
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