Inventory Management
Ballou's Inventory-Throughput Curve
Example of how to construct a graph of inventory versus turnover and how to use it to determine the level of inventory required to support a given level of business.
What it does
Example of how to construct a graph of inventory versus turnover and how to use it to determine the level of inventory required to support a given level of business.
See it in action
A worked example
Each site gives its throughput (what it ships in a year) and its inventory value, in the same units. Stock turns are throughput divided by inventory.
| Site | Throughput | Inventory | Stock turns |
|---|---|---|---|
| Site A | 32.6 | 3.9 | 8.36 |
| Site B | 18.0 | 4.5 | 4.00 |
The same figures are plotted as a chart, with this table beside it. A curve is only drawn when there are enough sites to support one.
What data it needs
We will list the data this Tool-module needs when it is ready to launch.