Retail Dogma

Inventory

Clearance Sale

Clearance sale is a markdown event that retailers use to clear the remaining merchandise at very low prices. Sometimes the price levels at this stage of markdown can be even below the cost price of the product. What is The Difference Between Sale & Clearance? Clearance is a type of sale event with a further …

Clearance Sale Read More »

Average Inventory

Average inventory is usually used during the calculations of different inventory metrics that are used to assess the efficiency of inventory management practices at a company. What is Average Inventory? Average Inventory is the average value of inventory that a company holds over a certain period of time. This period could be a month, a …

Average Inventory Read More »

Days Sales in Inventory

Days Sales in Inventory (DSI) measures how many days it takes to sell the company’s inventory. It is used together with other metrics like inventory turnover ratio and GMROI to track how efficiently a company manages its inventory. While a low DSI can be positive or negative; ie it could mean that either the company …

Days Sales in Inventory Read More »

Shrinkage: Stock Loss

Shrinkage is the inventory lost due to shoplifting, internal theft, damaged goods, or administrative errors done at retail stores. Every year, quarter or half year the retailer conducts a stock count to track all the existing inventory and then compare it with the value of inventory in the books (on the balance sheet). The difference …

Shrinkage: Stock Loss Read More »

Inventory Turnover

Inventory turnover ratio (IT) measures how many times a company turns its inventory during a certain period of time. It gives an idea about how efficiently a company is managing its inventory. How To Calculate Inventory Turnover? Inventory Turnover Formula: Inventory Turnover (IT) = COGS ÷ Average Inventory To calculate IT you will need the …

Inventory Turnover Read More »

Forward Stock Cover

Forward stock cover measures how long the current stock on hand will cover future forecasted sales periods. This measure is used in inventory management to ensure product availability and adequate stock on hand coverage. It is also used during the buying budget calculation to ensure the inventory ordered is enough to cover sales for the …

Forward Stock Cover Read More »