Food Inventory Cost Calculator
Calculate average inventory value, inventory turnover ratio, and days sales of inventory (DSI) to optimize kitchen cash flow and avoid spoilage.
Inventory Turnover & Velocity Formula
Average Inventory = (Beginning + Ending) / 2; Turnover Ratio = COGS / Average Inventory; Days On Hand = Period Days / Turnover Ratio- Average Inventory: Typical dollar value of food sitting in walk-ins, freezers, and dry storerooms.
- Turnover Ratio: Frequency with which total food inventory is completely sold and replenished (target 4–8 times/month).
- Days on Hand: Average number of days ingredients sit in storage before being served (target 5–8 days for peak freshness).
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Inventory valuation is based on landed wholesale cost.
- Holding cost estimate assumes 2% per month for refrigeration power and storage risk.
Frequently Asked Questions
Why should restaurant inventory turn over so quickly?
Unlike dry goods retail that turns inventory 4 to 8 times per year, restaurants handle perishable dairy, produce, and seafood. Turning inventory 4 to 6 times per month ensures fresh food on plates and prevents working capital from expiring on shelves.
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