The Average Storage Period is a key performance indicator (KPI) that measures the average length of time inventory items remain in storage before being sold, consumed, or moved out of the warehouse. This metric quantifies the duration between when goods are received into storage and when they are dispatched, providing critical insight into inventory velocity and capital efficiency. Expressed typically in days, weeks, or months, the Average Storage Period serves as a fundamental measure of warehouse operational efficiency and inventory management effectiveness.
Calculation Method
- Average Storage Period (in days) = 365 days ÷ Inventory Turnover Rate
- Average Storage Period = (Average Inventory ÷ Cost of Goods Sold) × 365 days.
