GITNUX MARKETDATA REPORT 2023
Must-Know Inventory Kpi Metrics
Highlights: The Most Important Inventory Kpi Metrics
- 1. Inventory Turnover
- 2. Days Sales of Inventory (DSI)
- 4. Carrying Cost of Inventory
- 5. Stock-outs
- 6. Excess Stock
- 7. Write-offs
- 8. Order Accuracy
- 9. Fill Rate
- 10. Sell-through Rate
- 11. Lost Sales
- 12. Obsolete Inventory Ratio
- 13. Inventory to Sales Ratio
Table of Contents
Inventory Kpi Metrics: Our Guide
Optimizing inventory management lies at the heart of a successful business operation. This article unveils the must-know inventory KPI metrics based on recent comprehensive studies. Immerse yourself in the following lines to gain deeper insights into these key metrics to reap higher efficiency and profitability in your business processes.
Inventory turnover counts how often a company sells and replaces its inventory, indicating inventory management efficiency and sales speed.
Days Sales Of Inventory
DSI measures the average number of days it takes for inventory to be sold. A lower DSI indicates that it takes less time for a company to sell its inventory, which is generally seen as positive.
This metric calculates the amount of profit realized for each dollar invested in inventory. A higher GMROII suggests that the company is effective in turning inventory investments into profits.
Carrying Cost Of Inventory
This metric tracks the total cost of inventory, including storage, insurance, and obsolescence. Lower costs mean more efficient inventory management.
The number of times a company runs out of stock for a particular item. Frequent stock-outs can negatively impact customer satisfaction and lead to lost sales.
Excess stock is surplus inventory beyond demand, indicating inefficiency and potential higher costs.
The value of inventory that has been deemed unsellable due to damage, obsolescence, or other issues. Lower write-offs indicate more efficient inventory management.
Order accuracy percentage reflects error-free deliveries, crucial for customer satisfaction and returns reduction.
Fill rate percentage shows orders fulfilled without stock-outs. A higher rate means meeting customer demand consistently.
Sell-through rate is the percentage of items sold compared to initial inventory. A high rate indicates effective inventory management and sales generation.
The number of potential sales lost due to stock-outs or supply chain disruptions. Minimizing lost sales is crucial for maintaining customer satisfaction and maximizing revenue.
Obsolete Inventory Ratio
The percentage of total inventory that is considered obsolete or unsellable. A low obsolete inventory ratio indicates efficient inventory management and effective forecasting.
Inventory To Sales Ratio
Inventory-to-sales ratio compares on-hand inventory to total sales. Lower ratios imply effective inventory management relative to sales.
Frequently Asked Questions
What are inventory KPI metrics, and why are they important for businesses?
What are some common inventory KPI metrics used by businesses to analyze their inventory performance?
How can businesses calculate the Inventory Turnover Ratio, and what does it indicate?
What is the significance of the Days Inventory Outstanding (DIO) metric?
How can businesses reduce their Stockout Rates and improve customer satisfaction?
How we write these articles
We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly. See our Editorial Guidelines.