What is the rate of performance?

Inventory management includes several tasks and activities that focus on sales for sale. The fulfillment rate is the ability of society to satisfy the current demand with the inventory at hand. Accountants and managers are usually responsible for determining how much stock it is necessary to have at hand all the time. Shares appear when the performance rate exceeds the current inventory. This happens when the company does not have enough products at hand to suit consumer demand.

There are many different formulas to calculate the level of inventory. A closely related inventory formula is the calculation of safety stocks that represents shares held at hand to alleviate or eliminate stocks. Companies use these technical mathematical formulas to find out how the performance rate is compared with the security calculation. The information pieces needed to complete the safety and performance patterns include delivery time, logistics, inventory turnover and other data specific to the company invention -conservative process.Companies usually calculate these formulas per month or quarterly. For example, the company stores 100 widgets for sale; Over the next 30 days, the company sells 73 widgets. The rate of performance of the company is 73 percent. The formula basically means very little. This leads to multiple technical inventory formulas that provide more information about safety, logistics and other factors that affect the company's stock.

Accounting ratios can also play a role in calculating the rate of performance of the company. This includes reserves turnover and inventory periods. Inventory turnover says the company, how many times a year the company sells the company through its entire stock. The basic formula is to divide the average inventory into the cost of goods of theld; If you want to find an average inventory, add the initial inventory to the final inventory and do two. The high value suggests that the company sells a setBy eating its inventory several times a year, which requires a high stock level to ensure a good level of performance.

Inventory period is the number of days at present. This helps the company to work on the way to the inventory formula. The formula for the inventory period is divided by the costs of the goods sold, while the average inventory begins with the supplies plus the end reserves divided by two. The high ratio suggests that the company has several days for sale. This means that safety reserves should be higher.