Inventory
nHolding costs are a
killer.
–Avg costs are 25 – 40% of avg. inventory per year
–Just what is average inventory anyway? It is the amount of inventory we usually have on hand.
nInventory turns =
(COGS / Avg Inven)
–Example: COGS = $10,000,000. Avg. Inven = 2.5 million.
–Turns = 10,000,000 / 2,500,000 = 4
nSo what?? Who Cares?!