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Inventory KPI Calculator

Calculate four inventory KPIs at once: turnover rate, average storage days, holding cost rate, and stockout rate. Benchmarks included.

Inventory KPIs show how efficiently your warehouse is working. Four metrics are enough to see whether capital is tied up, how long materials are sitting, what storage costs, and how often shortages occur.

  • Turnover rate = Annual consumption / Avg. inventory value
  • Storage days = 365 / Turnover rate
  • Holding cost rate = Storage costs / Avg. inventory value × 100
  • Stockout rate = Shortfall orders / Total orders × 100

How do you read the results?

  • Turnover rate below 3 for standard materials: capital is tied up.
  • Storage days above 90: material is sitting too long.
  • Holding cost rate above 30%: storage is too expensive.
  • Stockout rate above 5%: systemic reorder problem.

Note: The calculator assumes steady annual consumption; for highly variable volumes, quarterly averages are more accurate. Calculate per material group or A-item where possible instead of for the whole business, otherwise fast movers mask dead stock. The benchmarks apply to standard materials; specialty materials with long lead times normally have lower values.

Formulas

Turnover rate

Annual consumption / Avg. inventory value

Avg. storage days

365 / Turnover rate

Holding cost rate

Storage costs / Avg. inventory value × 100

Stockout rate

Shortfall orders / Total orders × 100

Example: HVAC contractor

  • Annual consumption48,000 €
  • Avg. inventory value6,000 €
  • Storage costs1,200 €
  • Orders with shortfall3
  • Total orders200

48,000 / 6,000 = 8

8× · 46 days · 20% · 1.5%

All four inventory KPIs at once

Frequently asked questions about inventory KPIs

What is the inventory turnover rate and how is it calculated?

The inventory turnover rate shows how many times the average stock is fully consumed and replenished within a year. Formula: annual material consumption divided by the average inventory value. A value of 8 means the stock turns over eight times per year.

How do you calculate the average storage days?

Formula: 365 divided by the turnover rate. If stock turns eight times, each item sits in storage for an average of 46 days (365 / 8 = 45.6). More than 90 days for standard materials is a warning signal for excess stock.

What is the holding cost rate and what is a normal value?

The holding cost rate shows what percentage of the inventory value is incurred as annual costs. Formula: total storage costs divided by the average inventory value, times 100. Benchmark for trade businesses: 15 to 25 percent. Above 30 percent signals excessive storage costs.

How do you calculate the stockout rate?

The stockout rate measures how often orders are delayed due to missing materials. Formula: number of orders with at least one material shortfall divided by total orders, times 100. Below 2 percent is the target. Above 5 percent indicates a systemic reorder problem.

What is a good inventory turnover rate for a trade business?

For consumables such as standard parts, small parts, and pipes, a turnover rate of 6 to 12 is solid in the trades. Specialty materials with long lead times can have lower values of 2 to 4 without being a problem. Below 3 for standard materials is a warning signal for excess stock.

What does a low turnover rate actually cost?

Tied-up capital in storage costs 4 to 6 percent interest on the inventory value, plus space costs, insurance, and increased risk of obsolescence. With an average inventory value of 15,000 euros and a holding cost rate of 20 percent, that is 3,000 euros per year before a single worker touches the material.

Sources and further reading

Sources

  • Tempelmeier, H. (2020): Bestandsmanagement in Supply Chains, Norderstedt: Books on Demand
  • Gudehus, T. (2012): Logistik 2: Netzwerke, Systeme und Lieferketten, Springer
  • Bundesverband Materialwirtschaft, Einkauf und Logistik (BME): Kennzahlenhandbuch Einkauf und Logistik
  • Bitkom Research (2025): Digitalisierung im Handwerk 2025

Read more

Next steps

You now know your inventory KPIs. The logical next step: set reorder points for your A-items so materials never run out before they are replenished.

Go to reorder point calculator
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