01
Formula
Turns = cost of goods ÷ average inventory.
EOQ = square root of (2 × demand × order cost ÷ holding cost). Safety stock = daily demand × safety days. Reorder point = daily demand × lead days + safety stock.
Apply for financingInventory turns
Inventory turnover calculator, EOQ, and reorder point
This inventory turnover calculator divides cost of goods sold by average inventory. The EOQ calculator and the economic order quantity calculator use the square root of 2 times demand times order cost, divided by holding cost. The safety stock calculator is daily demand times safety days. The reorder point calculator adds lead-time demand to that safety stock.
Find
Turns
6.00
Days of inventory61
Cost of goods$240,000.00
Average inventory$40,000.00
Illustrative estimate only, not a financing offer. The rate is an assumption you set. Actual rates, terms and payments depend on a financing provider’s review.
How it works
Turns are cost of goods divided by average inventory.
Two hundred forty thousand dollars of cost of goods and $40,000 of average inventory is 6.00 turns, or about 61 days of inventory. Economic order quantity for 1,200 units a year, a $50 order cost, and $4 of holding cost per unit is 173 units. Reorder point for 10 units a day, 7 days of lead time, and 3 safety days is 100 units, of which 30 are safety stock. These are textbook formulas. They assume steady demand and a holding cost you can defend. Dengaro arranges equipment financing for warehouse equipment. The units on this page are not a loan amount.
02
Example
$240,000 of cost of goods and $40,000 of inventory.
Turns are 6.00. The EOQ example is 173 units. The reorder point example is 100 units, with 30 units of safety stock.
03
Tips
Use the same inventory definition all year.
Cost of goods and average inventory both have to be at cost, or both at retail. Mixing them invents a turn. The safety stock calculator here is days of demand, not a statistical service level.
04
Equipment
The racks and the forklift hold the inventory.
Dengaro arranges financing for warehouse equipment. These units are not a loan amount.
Important questions
Know what to expect.
What is an EOQ?+
The order size that balances the cost of placing orders against the cost of holding units. The economic order quantity calculator is that square-root formula.
Is 6 turns good?+
This inventory turnover calculator does not say. It depends on the goods. Compare it with your own history.
Does safety stock use a Z score?+
No. You type days of cover. A statistical safety stock calculator would need a demand deviation this form does not ask for.
When do I reorder?+
When on-hand inventory reaches the reorder point. That point is lead-time demand plus the safety stock you entered.
Financing built into the sale