Weeks Cover Calculator Explained:
(a) What is this? These calculators tell you your annual stock turn or weeks of stock you have on hand.
(b) What does this tell me? Both of the calculators generate a stock turn number. You have are two different methods of achieving this. In the top calculator, you can see that it tells you your average weekly sales at cost (COGS) and how many weeks of inventory you have, assuming a constant rate of sale. It also tells you the annual stock turn.
(c) Why should I use it? To help you manage your stock. Too much stock becomes expensive for a business as you often have pay the suppliers/vendors for the stock before you sell it. If the stock turn is fast enough, you will have sold the stock before you have to pay for it. If the stock turn is too fast, you spend a lot of time re-stocking, experience out of stocks and lost sales. Getting a balanced stock turn is the objective.
(d) Caution: While some of these equations say you should enter annual sales, you can enter sales for any time period as long as it covers a reasonable time period. These calculators don't tell you to increase or decrease stock levels. The simply allow you to make more informed decisions. Any decisions made are at your own risk.
Weeks of Inventory