AI Supply Chain Editorial Team

Stockout cost is the total financial loss from not having a product available when customers want it. A practical estimate adds the margin on…

Pallet space calculation turns a stock quantity into the number of pallets it fills, the floor positions those pallets need and the floor area…

The cash-to-cash cycle time, also called the cash conversion cycle, is the number of days cash stays tied up between paying suppliers and…

An OTIF calculation measures the share of orders delivered both on time and in full, while fill rate measures how much of the ordered quantity…

Inventory carrying cost is the annual cost of holding stock, expressed as a percentage of the stock’s value. The formula adds four…

The EOQ formula gives the order size that minimises the combined yearly cost of placing orders and holding stock. Economic order quantity…

The forecast accuracy formula compares forecast demand with actual demand, period by period, and summarises the gap as a percentage. The most…

The reorder point formula tells you the stock level at which to place a new order so that it arrives before you run out. Reorder point equals…

The safety stock formula sets the buffer inventory you hold to cover uncertainty in demand and supplier lead time. With a target service…

The inventory turnover ratio shows how many times a business sells through and replaces its stock in a period. You calculate it by dividing…