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AE123

Days of Finished Goods Inventory

Days of Finished Goods Inventory measures the number of days worth of Inventory the company holds on its books that have a Finished Goods status. Merchandizing companies (Retailers) call this Merchandizing Inventory.

Calculation

Days of Finished Goods Inventory
=
Finished Goods Inventory   × 365 days
Cost of Goods Sold

where:

  • Finished Goods Inventory = Average Finished Goods Inventory (= average of beginning and ending inventories). Finished Goods Inventory includes Unrestricted, Restricted and Blocked FG Inventory.
  • CO11 = Total annual Cost of Goods Sold

Unit of measure: days (Calendar days)

Alternative names include: Finished Goods Inventory Days of Supply. See also: Finished Goods Inventory Turns.

Notes

Days of Finished Goods Inventory may be calculated using value or volume. Value-based is preferred as Asset Efficiency 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
AE123Days of Finished Goods Inventory3AE123
AE1231Finished Goods Inventory - Unrestricted4AE1231
AE1232Finished Goods Inventory - Restricted4AE1232
AE1233Finished Goods Inventory - Blocked4AE1233

Process(es)

IDNameLevelx
P403Calculate Delivery Plan3P403
M101Create Schedule3M101
M202Schedule Make Orders3M202
M303Schedule Resources3M303
M309Transfer3M309

Term(s)

IDNameClearx
FGFinished GoodsFG
INVInventoryINV
Days of Finished Goods Inventory Days Of Inventory 51230 3 {{{keywords}}} {{{description}}}