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It depends on you how you want to calculate it,
It can be Weekly, Monthly & Yearly, no specific scale of time but most companies prefer Yearly because it provides you with a clear picture of how well you Inventory is doing.
Stock turnover time period is the calculation of how quickly stock moves. The trick is to try and sell the stock as many times as possible without risking "out of stock" situations before you pay the vendor. The short reference to this is "TURNS". How many time do you turn stock in a year.
In FMCG retail a good average goal will be to acheive20 Turns And is calculated as follows...
Snapshot of Stock on Hand devided by Sales for the week. Compare this figure with divideing it also by an ave Sales per week in order to compare the current week to the ave.
In other words. SOH $4 mil devided by sales of the week of $1,8 mil.
=2.22 weeks stock
=15.55 days stock (x7days)
Turns per year =365 days / by15.55days
=23 Turns per annum
Now high turns are only good if your Service level is95%, meaning you are ialways in stock.
If you pay your vendors say ave30 day of statement then you will pay vendors +- every45 days and thus (45 /15,55) you will sell the stock2,89 times before you pay the vendor for the first delivery.
Mr. Afzan
I think you may ask for inventory turnover and this analysis tools look for the sales by cost divided by the average inventory by cost in a year.
Average inventory is starting inventory minus final inventory for a year .
Stock turnover period for all inventory depends majorly on average daily shipment/sales and consideration storage capacity with an inventory shelve-life/viability.
It is depend to the stock nature.
