Inventory per store


Inventory per store is calculated by dividing total inventory by the total number of stores owned by a company

This metric is most often used in the retail industry to compare inventory levels across companies of difference sizes. This is because total inventory alone is not necessarily an accurate tool to access companies of different volumes -- a large company is expected to have a larger inventory than a small one.

All else constant, a low inventory per store is often seen as more favorable since high inventory levels means that there is a large amount of capital which is sitting on shelves and not being fully utilized. Instead, just-in-time and other optimizing methods push to lower inventory and increase the Inventory turnover ratio.

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