Example of a weighted average of the inventory level

The average projected inventory of a plan item is one of the performance indicators in the Resource Analysis and Optimization module of Enterprise Planning. LN computes it as a weighted average of the average inventory levels found for the various plan periods. The average is a weighted average in that it takes the length of each plan period into account.

Example

Inventory on hand = 10

Plan period123
Length of plan period (days)225
Projected (end) inventory203099
Average inventory level152564.5

 

In this example, the weighted average inventory level for all plan periods is computed as follows:

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