Inventory formulas are mathematical equations used to determine the optimal number of goods or materials that should be held in reserve at any given point in time. By taking into account known demand, cost, and supply factors, inventory formulas can provide business owners with valuable insights into their production and purchasing processes. They can also help minimize costs associated with unplanned stock outs, reduce excess stock carrying costs, and achieve better alignment between supply and demand. In short, inventory formulas are a powerful tool for maximising efficiency and profitability in businesses of all sizes.