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Days of WIP Inventory Days of Inventory 51220 3 {{{keywords}}} {{{description}}}
AE122
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Latest revision as of 14:48, 10 June 2017
Days of WIP Inventory measures the average number of days of inventory the company holds on its books that have been classified as WIP inventory.
Calculation
| Days of WIP Inventory | ||||
| = |
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where:
- Work-in-Process Inventory = Average Work-in-Process Inventory during the year (the average of beginning and year-end WIP inventories). Work-in-Process inventory includes Unrestricted, Restricted and Blocked WIP inventories.
- Cost of Goods Sold = Annual Cost of Goods Sold
Unit of measure: days (Calendar days)
Alternative names include: Inventory WIP Days of Supply. See also: WIP Inventory Turns.
Notes
Days of WIP Inventory may be calculated using value or volume. Value-based is preferred as AE focuses on the efficient use of capital. Volume-based calculations may overstate the importance of inventories of low-value materials.
Community Importance Rating: Hierarchy
| ID | Name | Level | x |
|---|---|---|---|
| AE12 | Days of Inventory | 2 | AE12 |
| AE122 | Days of WIP Inventory | 3 | AE122 |
| AE1221 | Work-in-Process Inventory - Unrestricted | 4 | AE1221 |
| AE1222 | Work-in-Process Inventory - Restricted | 4 | AE1222 |
| AE1223 | Work-in-Process Inventory - Blocked | 4 | AE1223 |
Process(es)
| ID | Name | Level | x |
|---|---|---|---|
| M101 | Create Schedule | 3 | M101 |
| M104 | Inspect | 3 | M104 |
| M202 | Schedule Make Orders | 3 | M202 |
| M203 | Issue Materials | 3 | M203 |
| M204 | Produce | 3 | M204 |
| M205 | Inspect | 3 | M205 |
| M303 | Schedule Resources | 3 | M303 |
| M304 | Issue Resources | 3 | M304 |
| M305 | Produce | 3 | M305 |
| M306 | Inspect | 3 | M306 |
| M407 | Inspect | 3 | M407 |