![]() But generally, it's acceptable to have around 20-30% of weekly invoice use dedicated to safety stock, which allows for unexpected demand. Safety stock levels vary for different ingredients you'll keep on hand. A general formula for measuring your par level is here: Par level = (Weekly Inventory Use + Safety Stock) / Deliveries Per Week Here's an example: (14 cases of red wine used weekly + 3 cases (20% safety)) / 2 deliveries per week = 8.5 So, the par level for this specific item would be 8.5 cases of red wine. ![]() Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory Once you've collected the item's inventory on hand ratio and your sales report data, you'll be able to determine how much product is used between each delivery and how quickly you use up inventory. (Beginning Inventory + Ending Inventory) / 2 = Average Inventory ![]() Here are helpful formulas you can use:Ĭalculate Average Inventory for a Time Period In other words, inventory turnover measures the number of times the restaurant sold out its inventory in a specific period. Inventory turnover ratio is an efficiency metric that compares the amount of product a restaurant has on hand (called inventory) to the amount it sells. We suggest calculating an item's inventory turnover ratio to understand its demand.
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