Hello All,
Since this place has professionals from all places, i have a question.
What is a good ratio or sales to inventory? (1/3 , 2/3 , 1 Million in sales to 1 million inventory etc)
For Distributors (Tri-Ed, ADI etc.) ?
For OEM (Savvy, Nellys etc) ?
For Manufacturers (Dahua, ACTi etc)?
For manufacturers, Avigilon has 1.7 months of inventory ($56 million inventory currently, ~$400 million annual sales) and Axis has 1.2 months of inventory (809 million SEK, ~8,000 million SEK annual sales). Keep in mind, Axis has had a product shortage. In terms of sales to inventory ratio that would be from 7 to 1 to 10 to 1.
Good question, I don't that much here but hope those 2 data points help.
For distribution it's a function of their E.O.Q ( economic ordering quantity) model. This is a measurement of sales, Mfg lead times, and safety stock. This leads to that favorite discussion on inventory turns. Most inventory management people are measured on keeping their inventory turns high ( 4+). Depending on the item , turns could be as high as 6-7, if the OEM keeps a lot of inventory. The notion of " why use my money when I could use yours" always comes to mind.This creates more cash moving through the system.
Ask questions and get answers to your physical security questions from IPVM team members and fellow subscribers.