Shrinkage rate

Shrinkage rate calculation = average inventory average daily Cost Of Goods Sold

This ratio is also known as Shrink rate.

It is part of the logistics ratios for inventory analysis.

It measures the lost of products due to inventory discrepancies, to damages during the handling operations and also to discrepancies in the packaging inventories (pallet, containers…). This ratio is a good indicator of the supply and inventory control efficiency. T

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Shortage rate

Shortage rate calculation (SKUs) = Number of SKUs in a shortage situation ÷ Total number of live SKUs

It is part of the logistics ratios used for inventory analysis.

It measures the products availability level. This ratio is a good indicator of the service given to the customers and of the supply and inventory control efficiency.

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Inventory turnover

Inventory turnover calculationaverage daily Cost Of Goods Sold / average inventory

This ratio is also known as Inventory turns.

It is part of the logistics ratios for inventory analysis and of the financial ratio for the management quality analysis.

It measures the number of times inventory is sold during a period. This ratio is a good indicator of the quality of inventory (obsolescence) and of the supply and inventory control efficiency. This indicator based on past values of sales has the inconvenience not to take into account seasonal and promotional variations. It can be more realistic to calculate it on the basis of sales forecasts.

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