Calculate Average Inventory is a calculation providing critical data for companies to make informed business decisions. It is the process of calculating the average amount of inventory that a business holds over a given period of time. Companies calculate this information to have a better understanding of their current holdings and to properly plan for future production or purchasing activities. By understanding their current average inventory, businesses are better equipped to anticipate customer demand and maintain appropriate levels of stock. Calculate Average Inventory is an important part of running an efficient and profitable business.