Target Inventory Investment Calculator

Formula

The formula to calculate Target Inventory Investment is:

\[ \text{Target Inventory Investment} = \frac{\text{Projected Annual Cost of Goods Sold from Stock Sales}}{\text{Target Inventory Turnover}} \]

Where:

\(\text{Projected Annual Cost of Goods Sold from Stock Sales}\) is a realistic projection of what your sales from warehouse stock will be (at cost) during the next 12 months.
\(\text{Target Inventory Turnover}\) is the theoretical measure of how often, at the current rate of sales, you sell your entire inventory in one year.

Target Inventory Investment is the difference between goods produced (production) and goods sold (sales) in a given year.

Let's assume the following values:

Using the formula:

\[ \text{Target Inventory Investment} = \frac{200000}{20} \]

Evaluating:

\[ \text{Target Inventory Investment} = 10000 \]

The Target Inventory Investment is 10000.

Projected Annual Cost of Goods Sold from Stock Sales	Target Inventory Turnover	Target Inventory Investment
100000	10	10,000.00
100000	15	6,666.67
100000	20	5,000.00
100000	25	4,000.00
100000	30	3,333.33
150000	10	15,000.00
150000	15	10,000.00
150000	20	7,500.00
150000	25	6,000.00
150000	30	5,000.00
200000	10	20,000.00
200000	15	13,333.33
200000	20	10,000.00
200000	25	8,000.00
200000	30	6,666.67
250000	10	25,000.00
250000	15	16,666.67
250000	20	12,500.00
250000	25	10,000.00
250000	30	8,333.33
300000	10	30,000.00
300000	15	20,000.00
300000	20	15,000.00
300000	25	12,000.00
300000	30	10,000.00
350000	10	35,000.00
350000	15	23,333.33
350000	20	17,500.00
350000	25	14,000.00
350000	30	11,666.67
400000	10	40,000.00
400000	15	26,666.67
400000	20	20,000.00
400000	25	16,000.00
400000	30	13,333.33
450000	10	45,000.00
450000	15	30,000.00
450000	20	22,500.00
450000	25	18,000.00
450000	30	15,000.00
500000	10	50,000.00
500000	15	33,333.33
500000	20	25,000.00
500000	25	20,000.00
500000	30	16,666.67