Question

From the following information, calculate Inventory Turnover Ratio and Inventory Turnover Period :

Maximum Stock Level 1,500 Units Minimum Stock Level 600 Units
Re-order quantity 750 Units
Issues 3,750 Units​

Answer 1

Explanation:

The given information does not tell us about the costs of goods or inventory that has been issued in a particular period of time.

Inventory turnover ratio is generally calculated by taking the sum of the cost of goods sold and dividing it by the average of the inventory.

Inventory turn over period is calculated by taking the period under consideration (normally 365 days a year) and dividing it by inventory turn over ration