5 Point Annual Average

Posted in Operations and Supply Chain Terms, Total Reads: 713
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Definition: 5 Point Annual Average

5 Point Annual Average is a methodology to determine average for a one year period generally for inventories in PMG Studies. Performance Measurement Group(PMG) is the management consulting arm of PwC with expertise in operational performance. It provides industry specific standards in areas of Supply Chain Management.


Example of 5 point Annual Average

In case of want to calculate the average inventory for a product in a warehouse you can take five reference points and calculate the average for the same

 

5 point average inventory = (31/12/10 + 31/03/11 + 30/06/12 + 30/09/13 + 31/12/14)/5


Usage of 5 point Annual Average

The % point average is used to calculate these two terms given below

1. Total Inventory Days of Supply

 

Formula:

(5 Point Annual Average Gross Inventory X 365)/(Cost of Goods Sold)

 

2. Inventory Days of Supply

 

Formula:

(5 Point Annual Average Gross Inventory X 365)/(Calendar Year Value of Transfers )

 

is a methodology to determine average for a one year period generally for inventories in PMG    Studies.

PMG

Performance Measurement Group(PMG) is the management consulting arm of PwC with expertise in operational performance. It provides industry specific standards in areas of Supply Chain Management.

Example of 5 point Annual Average

In case of want to calculate the average inventory for a product in a warehouse you can take five reference points and calculate the average for the same

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