Warehouse & Logistics Encyclopedia
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Weighted Average Cost of Inventory
Calculating inventory value based on the average cost of all units available for sale.
Definition
Weighted average cost assigns the same value to each unit in inventory by dividing the total cost of goods available by the total units available.
Overview
Role
Calculating inventory value based on the average cost of all units available for sale.
Focus
Weighted average cost assigns the same value to each unit in inventory by dividing the total cost of goods available by the total units available.
Example
See the definition above for context.
FAQs
Q: How is Weighted Average Cost of Inventory used in logistics and warehousing?
A: Weighted average cost assigns the same value to each unit in inventory by dividing the total cost of goods available by the total units available.