1. What Is On Hand Inventory?

On Hand Inventory represents the current quantity of goods available for sale or use at any given time. It is calculated by considering the starting inventory, incoming shipments, and outgoing distributions.

2. How Does The Calculator Work?

The calculator uses the On Hand Inventory formula:

Where:

• \( \text{Beginning Inventory} \) — Starting quantity of inventory at the beginning of the period
• \( \text{Receipts} \) — New inventory received during the period
• \( \text{Issues} \) — Inventory distributed or sold during the period

Explanation: This formula provides a real-time snapshot of available inventory by accounting for all inventory movements during a specific period.

3. Importance Of On Hand Inventory Calculation

Details: Accurate on hand inventory calculation is crucial for inventory management, preventing stockouts, optimizing reorder points, managing cash flow, and ensuring efficient supply chain operations.

4. Using The Calculator

Tips: Enter beginning inventory, receipts, and issues in units. All values must be non-negative numbers. The calculator will compute the current on-hand inventory.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between on hand and available inventory?
A: On hand inventory includes all physical inventory, while available inventory excludes committed or reserved items that are not yet shipped.

Q2: How often should on hand inventory be calculated?
A: For most businesses, daily or weekly calculations are recommended, though frequency depends on inventory turnover rates and business needs.

Q3: What factors can affect on hand inventory accuracy?
A: Shrinkage, damage, theft, recording errors, and timing differences between physical movement and system updates can affect accuracy.

Q4: How does on hand inventory relate to reorder points?
A: On hand inventory is compared against reorder points to determine when to place new orders and maintain optimal stock levels.

Q5: What is the ideal on hand inventory level?
A: The ideal level balances having enough stock to meet demand while minimizing carrying costs, and varies by industry, product type, and sales velocity.