![inventory turns per year inventory turns per year](https://cdn2.hubspot.net/hubfs/530512/inventory%20turnover%20over%20an%20annual%20period.png)
You can use this excel sheet to create a 6 month merchandise plan, 6 months in advance. The total months on the sheet are 18 months, and we show you exactly how to fill it in the instructions. The sheet also automatically calculates the forward stock cover for each category, every month, so you can increase/decrease your purchases based on the stock cover you want to target for each category. The template includes monthly sales and intakes, and is expandable to include more departments/ categories. Receiving (orders) that will arrive in March 2020 at cost = 20,000 $ ExampleĬurrent stock level (Jan 2020) at cost = 100,000$ This will require you to extract the current stock on hand that you have (at Jan 2020) and then subtract from it any stocks that you will sell from Jan to June 2020 and add to it any stock that will arrive between Jan to June 2020. You will need to get the opening stock for July 2020. You are now in Jan 2020 and want to budget for July 2020 to Dec 2020. To manually calculate the opening stock, check the example below: You will enter the beginning inventory for Jan 2020, and afterwards the opening and closing stocks will be calculated automatically, based on the sales figures and intakes you provide. Note: If you are using the Open to Buy excel sheet, you don’t need to perform the below calculation manually. However since we always budget for a period well in advance (usually 6 months ahead) this would mean calculating your opening stock well in advance. If you were budgeting for a period that starts tomorrow, this would have been your current stock value (at cost). For our example here this would be at the beginning of July 2020. Your opening stock is the stock value (at cost) that you carry at the beginning of the period you are budgeting for. This also helps during the year while updating the sheet with actual sales data as the months roll in, to show the current stock cover and take corrective actions if needed * Our OTB excel template displays the forward stock cover separately for each month, so the planner can increase/decrease their purchasing amount accordingly. You can use this as a benchmark for your business, based on which category your business belongs to.
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We keep an updated benchmarks list for inventory turns and other KPIs for different retail segments. and so on.įor fashion, 3 to 4 turns per year are considered good, so maintaining 3 to 4 months cover is appropriate. If the targeted turnover is 3 times per year, then the stock cover should be 4 months. The closing stock should provide the appropriate forward stock cover at the end of the budgeted period, based on the targeted inventory turns for the year.*įor example, if the business is targeting 2 turns per year, then the closing stock should provide a 6 months cover. This is used to define the closing stock level.
![inventory turns per year inventory turns per year](https://i.ytimg.com/vi/DzB2z_WDYg8/maxresdefault.jpg)
How many times do you plan to turn your inventory in a year?