10 Supply Chain Formulas

🔑 10 Supply Chain Formulas That Every Professional Should Keep in Pocket

In supply chain, numbers tell the real story. I’ve learned that when you know the right formulas, you don’t just track performance—you actually improve it.
Here are 10 formulas that I personally see as game changers for warehouse, logistics, and operations teams:

1️⃣ Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
2️⃣ Carrying Cost of Inventory = Inventory Value × % Carrying Cost
3️⃣ Order Cycle Time = Delivery Date – Order Date
4️⃣ Fill Rate = (Orders Delivered Correctly ÷ Total Orders) × 100
5️⃣ Perfect Order Rate = (Error-Free Orders ÷ Total Orders) × 100
6️⃣ Days Sales of Inventory (DSI) = (Average Inventory ÷ COGS) × 365
7️⃣ Economic Order Quantity (EOQ) = √(2 × Demand × Ordering Cost ÷ Holding Cost)
8️⃣ Freight Cost per Unit = Total Freight ÷ Units Shipped
9️⃣ On-Time Delivery % = (On-Time Deliveries ÷ Total Deliveries) × 100
🔟 Forecast Accuracy (MAPE) = (|Forecast – Actual| ÷ Actual) × 100

📌 These formulas are not just theory — they help in decision-making, cost control, and planning accuracy.