What is the Weeks On-Hand?
The average amount of time it takes to sell the inventory it holds.
This key performance indicator (KPI) tells you how efficiently your inventory is moving. When the weeks on-hand is high, it means that your inventory is not moving efficiently, which results in a lower profitability due to storage fees and tied-up capital. When the weeks of inventory on-hand is low, it means that your inventory is moving quickly and efficiently.
How to Compute The Weeks On-Hand?
o get your week on-hand, simply divide your average inventory on a time period by the cost of goods sold in the same time period. Multiply the result by 52.
Weeks On-Hand = (Average Inventory ÷ Cost of Goods Sold) x 52