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Cost, Tolerances & Reference

Inventory Turnover Calculator

Inventory turnover, days of inventory and a suggested reorder quantity from COGS and average stock value — the standard shop-management maths for deciding how much tooling and material to hold.

Input Parameters

Results

Turnover Ratio—
Days Inventory—
Optimal Order Qty—
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Inventory turnover and order quantity formulas

Inventory turnover measures how efficiently stock is managed. A high turnover means stock is moving quickly; low turnover ties up cash in unused inventory. For tool cribs, this metric drives purchasing and stocking decisions.

Frequently asked questions

What is a good inventory turnover for a CNC tool crib?

4-6x per year is typical for CNC consumables (inserts, end mills). Below 3x suggests overstocking. Above 8x may indicate stock-outs and emergency purchases. The goal is to have the right tools available without excessive inventory cost -- vending machine systems help achieve this balance.

How much does excess tooling inventory cost?

Carrying cost is typically 15-25% of inventory value annually (storage space, insurance, obsolescence, opportunity cost of capital). A $50,000 tool crib at 20% carrying cost loses $10,000/year. Reducing inventory from 6 months to 2 months supply frees up significant working capital.

What is a tool vending machine and is it worth it?

Tool vending machines dispense inserts, end mills, and shop supplies with employee ID tracking. They typically reduce consumption by 20-35% (eliminates hoarding and waste), automate reordering, and provide usage data by machine/cost centre. Payback is usually 6-18 months for shops with over $30k in annual tooling spend.

How to use this Inventory Turnover Calculator

Enter the annual cost of goods consumed (or annual tooling spend) and the average inventory value. The calculator shows the turnover ratio, days of inventory on hand, and a suggested monthly order quantity for rebalancing inventory levels.

Common mistakes to avoid

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