Excel for Inventory Management: Stock Tracking and Reorder Systems

Inventory Master List Structure

Essential columns for inventory tracking:

• SKU/Item ID (unique identifier)
• Item name and description
• Category/department
• Current quantity on hand
• Unit cost and selling price
• Reorder point and reorder quantity
• Location (bin/shelf/warehouse)
• Supplier information

Stock Level Monitoring

Flag items that need reordering:

=IF(OnHand<=ReorderPoint, “REORDER”, “OK”)

Use conditional formatting to highlight low stock in red, warning levels in yellow.

Calculate days of stock remaining:

=OnHand/AverageDailySales

Reorder Point Calculation

Basic reorder point formula:

=(AverageDailySales × LeadTimeDays) + SafetyStock

Economic Order Quantity (EOQ) for optimal order size:

=SQRT((2 × AnnualDemand × OrderCost) / HoldingCostPerUnit)

Inventory Valuation

Track inventory value:

• Total value: =SUMPRODUCT(OnHand, UnitCost)
• By category: =SUMPRODUCT((Category=“Electronics”)*(OnHand)*(UnitCost))
• Retail value: =SUMPRODUCT(OnHand, SellingPrice)

Inventory Turnover

Turnover ratio = Cost of Goods Sold / Average Inventory

Days in inventory = 365 / Turnover Ratio

Higher turnover means items sell quickly. Low turnover indicates slow-moving stock that ties up capital.

ABC Analysis

Classify inventory by value:

• A items: Top 20% of items by value (often 80% of total value)
• B items: Middle 30% of items
• C items: Bottom 50% of items

Use PERCENTILE to find cutoff points and IF statements to classify.

Official Resources

• SUMPRODUCT function — conditional inventory calculations
• COUNTIFS function — count items by criteria