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?

Classification of inventory
Inventory management
Fsn inventory analysis

Kolton Rodriguez

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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