Average Inventory Calculator

Formula

To calculate the Average Inventory (\(AI\)):

\[ AI = \frac{BI + EI}{2} \]

Where:

\(AI\) is the Average Inventory (units)
\(BI\) is the beginning inventory (units)
\(EI\) is the ending inventory (units)

What is Average Inventory?

Average Inventory is a measure used to estimate the amount of inventory a company has over a specific period. It is calculated by taking the sum of the beginning and ending inventory values and dividing by two. This metric helps in understanding inventory levels and managing stock efficiently.

Example Calculation 1

Let's assume the following values:

Beginning Inventory (\(BI\)) = 100 units
Ending Inventory (\(EI\)) = 200 units

Using the formula:

\[ AI = \frac{100 + 200}{2} = 150 \]

The Average Inventory is 150 units.

Example Calculation 2

Let's assume the following values:

Beginning Inventory (\(BI\)) = 300 units
Ending Inventory (\(EI\)) = 500 units

Using the formula:

\[ AI = \frac{300 + 500}{2} = 400 \]

The Average Inventory is 400 units.