How is FSN inventory analysis calculated?
Asked 2 years ago
Hi, can anyone here explain the formula for an FSN inventory that is easy to understand?
Saturday, February 26, 2022
FSN analysis is a tool to enable better inventory control and management. FSN stands for Fast, Slow, and Non-moving items. It classifies the inventory based on their consumption rate, average stay, and the regularity of movement from the inventory.
FSN analysis is a scientific way that entails certain parameters to separate inventory goods into the relevant categories. Here's how to calculate your inventory's average stay and consumption rate to understand if a product lies in the fast-moving, slow-moving, or non-moving category.
Average Stay: Total number of cumulative days inventory is detained/ (Opening Balance of the good + Total number of goods received for the period)
Consumption Rate: Quantity of goods issued/Total duration
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