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AE122

Days of WIP Inventory

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
=
Work-in-Process Inventory   × 365 days
Cost of Goods Sold

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.

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Hierarchy

IDNameLevelx
AE12Days of Inventory2AE12
AE122Days of WIP Inventory3AE122
AE1221Work-in-Process Inventory - Unrestricted4AE1221
AE1222Work-in-Process Inventory - Restricted4AE1222
AE1223Work-in-Process Inventory - Blocked4AE1223

Process(es)

IDNameLevelx
M101Create Schedule3M101
M104Inspect3M104
M202Schedule Make Orders3M202
M203Issue Materials3M203
M204Produce3M204
M205Inspect3M205
M303Schedule Resources3M303
M304Issue Resources3M304
M305Produce3M305
M306Inspect3M306
M407Inspect3M407

Term(s)

IDNameClearx
INVInventoryINV
WIPWork-in-ProcessWIP
Days of WIP Inventory Days Of Inventory 51220 3 {{{keywords}}} {{{description}}}