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KNOWLEDGE LIBRARY

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27Jun

Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

The Inventory Quality Ratio

The Inventory Quality Ratio (IQR) is a fairly new metric. It measures the percentage of the inventory investment that is in active SKUs. Different companies define active different ways, but the most common definition is the investment in SKUs that have moved within the last 12 months. There really aren’t that many good benchmarks for this metric yet. It’s just a good measure of how well the inventory is being managed.

 

Suppose somebody said they had an inventory quality ratio of 0.5 – what would that tell you?  It means 50% of the inventory investment is made in something that hasn’t moved in twelve month’s time.”

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