Inventory Management stock turnover


#1

Dear Sam

My Question regarding the Inventory management case:

I’m trying to calculate the Inventory (Stock) turnover on this site:

In the section:
“Approach 1: Sales Divided By Average Inventory
As an example, assume company A has $1 million in sales and $250,000 in COGS. The average inventory is $25,000. Using the first equation, the company has an inventory turnover of $1 million divided by $25,000 in average inventory, which equals 40 turns per year. Translate this into days by dividing 365 by inventory turns. The answer is 9.125 days. This means under the first approach, inventory turns 40 times a year and is on hand approximately nine days.”

On My Dashboard, I calculated the COGS and Total sales within the last year (365 Days)
based on the following Dax code:

Cost Goods Last 12 Months = 
VAR
	LastSaleDate = LASTDATE( 'Sales Data'[OrderDate] )
RETURN
IF( ISBLANK( [Inventory Stock Quantity] ),
BLANK(),
CALCULATE( SUM( 'Sales Data'[Costs] ),
	DATESBETWEEN( Dates[Date],
		LastSaleDate - 365,
		LastSaleDate ) ) )

Total Sales Over Last 12 Months = 
VAR
	LastSaleDate = LASTDATE( 'Sales Data'[OrderDate] )
RETURN
IF( ISBLANK( [Inventory Stock Quantity] ),
BLANK(),
CALCULATE( SUM( 'Sales Data'[Revenue] ),
	DATESBETWEEN( Dates[Date],
		LastSaleDate - 365,
		LastSaleDate ) ) )

sales = Total Sales Over Last 12 Months
COGS = Cost Goods Last 12 Months

Then I complete the remaining formula on the mentioned section by creating the following measures:

Average Inventory = DIVIDE([Total Sales Over Last 12 Months],[Cost Goods Last 12 Months],0)
No Of Turns Per Year = DIVIDE([Total Sales Over Last 12 Months],[Average Inventory],0)
Stock Turn Over = DIVIDE(365,[No Of Turns Per Year],0)

I have 3 questions :
Q.1 After I did the routines above I got results not logic in the two columns circled by red :

What is the mistake I did in the DAX formulas?

Q.2 Is the field (Days Per reorder) in a table ( Inventory stock control) = Stock Turn Over?

Q.3 Is the data in the (Inventory Stock Quantity) represent a transactional table or just a summary of the available stock inventory at the firm?

Thank you


#2

To me both those results you have circled look correct as per your formulas. I would have a good look at the formulas. I’ve match them out based on the formulas you have written and they are calculating exactly the results as they should.

Q2. Days per order just mean how long an order takes to arrive once it’s ordered.

Q3. Yes.