Microsoft Excel is one of the most beneficial programs you can use. Using Excel’s features and tools, you can do an almost infinite number of things with a dataset. This article will discuss the steps necessary to calculate the minimum and maximum inventory levels. The fundamental goal of inventory control is to guarantee that sufficient items or resources are available to fulfill demand without generating surplus inventory. In light of this, the subsequent lesson will focus on the step-by-step process of establishing the Min Max Inventory Calculation in Excel.

## What Is an Inventory System?

We can monitor the sales, stocks, and supplies with the help of an inventory system. A company’s inventory consists of everything it has and plans to sell to generate revenue. If you’re looking for an easy-to-use inventory system, go no further than the Min-Max method. A lot of businesses these days use automation. It would help to keep your materials supply at the minimum level, often known as the safety stock level. A company’s maximum inventory level is the most it can keep on hand to meet customer demand at the lowest possible cost. Using the inventory tracking database to set minimum and maximum stock levels helps us avoid the risks of overstocking and wasteful expenditure while guaranteeing ready access to materials or items with extended lead times.

**Safety Stock**

Safety Stock = [Maximum Consumption * Maximum Delivery Time] â€“ [Average Consumption * Average Delivery Time]

**Order Quantity**

Order Quantity = Damages + Safety Stock

**Min Inventory Level**

Minimum Inventory level = Order Quantity â€“ [Average Consumption Ã— Average Delivery Time]

**Max Inventory Level**

Maximum Inventory Level = Safety Stock + Order Quantity â€“ [Minimum Consumption * Minimum Delivery Time]

## Min Max Inventory Calculation in Excel: With Easy Steps

Establishing the Min Max Inventory Calculation in Excel might be challenging if the correct procedures are not followed. This post will lead you through the five steps required to calculate the minimum and maximum inventory levels to guarantee the availability of sufficient resources. We will begin by constructing a data model for this experiment, and we will eventually determine the monthly consumption. To illustrate this point, let’s examine a representative dataset. The below dataset has a column titled Product Name that contains some computer accessories, and other columns keep information about their monthly sales from January to December. We will determine the necessary Order Quantity and Safety Stock throughout the following steps. Lastly, with the help of two typical formulas, we will establish the Min Max Inventory Calculation. Follow these instructions attentively to understand the technique quickly.

### Step 1: Implement a Date Model to Calculate Min Max Inventory in Excel

The first and foremost step is to create a data model for illustration purposes. This article will consider the practice workbook containing four sheets: **Dataset**, **DemandSupply**, **SafetyStock,** and **Min-Max Inventory**. The **Dataset** sheet holds information about the monthly sales of computer accessories. The sheet named **DemandSupply** has two tables for product consumption or demand and delivery time. The **SafetyStock** sheet contains information about damages and calculates the Safety Stock. The last sheet, titled **Max Min Inventory**, keeps tabs on the minimum and maximum itemization.

- First, select the
**DemandSupplyÂ**sheet. - Second, choose four columns titled
**Product Name**,**Min Consumption**,**Max Consumption,**and**Average Consumption**.

- Likewise, make another table for the
**Delivery Time**in the**B12:E18Â**range.

- Later, open the
**SafetyStockÂ**sheet. - Next, select three columns:
**Product Name**,**Damages,**and**Safety Stock**.

- Lastly, to display the
**Min Max Inventory Level**, choose the**B4:F10Â**range.

**Read More:Â **How to Keep Track of Inventory in Excel

### Step 2: Apply MIN, MAX, ROUND and AVERAGEÂ Functions to Get Consumptions of Inventory

The **MIN **function finds the lowest digit in a list. Meanwhile, the **MAX** function multiplies together the most significant value in a collection. The **ROUND** function in Excel provides a result rounded to a specified precision. The **AVERAGE** function finds the average of the numbers you provide. The **Consumption** data will be determined using these procedures.

- First, open the
**DemandSupply**sheet and select the**C5Â**cell. - Second, input the following equation in the
**FormulaÂ**bar.

`=MIN(Dataset!C5:N5)`

- After that, press the
**Enter**or**Tab**key to see the result.

- Later, utilize the
**AutoFill Handle**icon and drag it to cell**C10**to apply the same formula to other cells in the**Min ConsumptionÂ**column.

- Now, choose cell
**D5**. - At this point, in the
**Formula**bar, type the following formula.

`=MAX(Dataset!C5:N5)`

- After that, you can see the result by pressing the
**Enter**or**TabÂ**key.

- Later, use the
**AutoFill Handle**icon and drag it to cell**D10**to apply the same equation to other cells in the**Max ConsumptionÂ**section.

- Choose cell
**E5Â**cell. - At this moment, type the following equation into the
**FormulaÂ**bar.

`=ROUND(AVERAGE(Dataset!C5:N5),0)`

- Afterward, you can press the
**Enter**or**Tab**key to see the result.

- Eventually, you can use the
**AutoFill Handle**icon to apply the same formula to other cells in the**Average ConsumptionÂ**portion.

**Formula Breakdown**

`=MIN(Dataset!C5:N5)`

To understand this formula, you must be familiar with the following Excel function:

**MIN Function**

**MIN(Dataset!C5:N5)**

**The MIN function** finds the least significant digit in a list. We must put an **Exclamation** mark between the sheet’s name and the range to refer to data or cells in other sheets. In this example, by involving the** MIN **function, we find 2.

`=MAX(Dataset!C5:N5)`

For this formula to make sense, you need to know how to use the following Excel function:

**MAX Function**

**MAX(Dataset!C5:N5)**

When called, the **MAX** function always returns the highest number in the given range. In this example, by using the **MAX** function, we get **26**.

**Formula Breakdown**

`=ROUND(AVERAGE(Dataset!C5:N5),0)`

To understand this formula, you must be familiar with the following Excel function:

**ROUND and AVERAGE Functions**

**AVERAGE(Dataset!C5:N5)**

In Excel, you can get the mean of a set of integers using the **AVERAGE** function. To refer a data or cells in other sheets, we must use an **Exclamation** sign between the sheet name and range. In this demonstration, by involving the **AVERAGE** function, we find **12.8333333333333**.

**ROUND(AVERAGE(Dataset!C5:N5),0)**

The **ROUND** function is what we need to round off a value to a certain precision. In this context, by utilizing the **Round** function, we find **13**.

**Read More:Â **How to Maintain Store Inventory in Excel

### Step 3: Use AVERAGE Function to Find Average Load Time of Inventory in Excel

This section will find the Average Delivery Time or supply time from the Min and Max Delivery times. To accomplish the work, please follow the instructions below.

- First, input the Min and Max Delivery Time throughout the
**C**and**DÂ**columns.

- Pick cell
**E13**right now. - Type the following equation into the
**Formula bar**right now.

`=ROUND(AVERAGE(C13:D13),0)`

- Then, you can see the result by pressing the
**Enter**or**TabÂ**key.

- In the end, you can use the
**AutoFill Handle**icon to apply the same formula to other cells in the**Average Delivery TimeÂ**column.

**Read More:Â **How to Make Inventory Aging Report in Excel

### Step 4: Determine Safety Stock for Min Max Inventory Calculation

Safety Stock is a backup product supply in case of an unexpected demand spike or shortage. Having a safety stock on hand reduces the consequences of supply chain disruptions, including supplier outages and lead time unpredictability. In this context, we will input the Damages in the data model and determine the Safety Stock using a typical formula.

- Firstly, open the
**SafetyStockÂ**sheet. - Second, input the intended values in the
**DamagesÂ**column.

- Third, go to cell
**D5**. - Now, type this equation into the
**FormulaÂ bar.**

`=DemandSupply!D5*DemandSupply!D13-DemandSupply!E5*DemandSupply!E13`

- Then, you can see the result by pressing
**Enter**or**Tab**.

- Lastly, the
**AutoFill Handle**icon can apply the same formula to other cells in the**Safety StockÂ**column.

**Read More:Â **How to Create Inventory Database in Excel

### Step 5: Display Min Max Inventory Calculation in Excel

Lastly, we will calculate the Order Quantity or Re-order level from the Damage Quantity and establish the Min Max Inventory Calculation in Excel utilizing the abovementioned formula. Please follow these directions to the letter to complete the assignment.

- First, choose the
**C5**cell in the**Min Max InventoryÂ**sheet. - Second, type the following equation into the
**FormulaÂ**bar.

`=SafetyStock!D5+SafetyStock!C5`

- Later, we can see the result using the
**Enter**or**TabÂ**key.

- Afterward, use the
**AutoFill Handle**icon and drag it to**C10**to apply the same formula to more cells in the Order QuantityÂ section.

- Now, pick cell
**D5**. - Input the following procedure at this place in the
**FormulaÂ**bar.

`=SafetyStock!D5`

- The result is then accessible through the
**Enter**or**TabÂ**key.

- Use the
**AutoFill Handle**icon to apply the same formula to other cells in the**Safety StockÂ**section.

- Select now cell
**E5**. - Enter the following formula here in the
**FormulaÂ**bar.

`=C5-DemandSupply!E5*DemandSupply!E13`

- We can use the
**Enter**or**Tab**key to retrieve the result.

- Use the
**AutoFill Handle**icon to apply the same procedure to other cells within the Minimum Inventory Level.

- The next step is to go to cell
**F5**. - Copy and paste this formula into the
**FormulaÂ**bar.

`=D5+C5-DemandSupply!C5*DemandSupply!C13`

- Then, hit
**Enter**or**Tab**to see the output.

- When finished, click the
**AutoFill Handle**symbol and drag it to cell**F10**. - As a result, the desired outcome will display like the below one.

**Download Practice Workbook**

If you want a free copy of the sample workbook covered during the presentation, kindly click the link below this paragraph.

## Conclusion

You can execute the Min Max Inventory Calculation in Excel by following the steps below. Please provide any additional recommendations or enhanced techniques as you continue to use them. Remember to put your thoughts, questions, and instructions in the space provided.

## Related Articles

- How to Calculate Economic Order Quantity in Excel
- How to Calculate Stock to Sales Ratio Using Formula in Excel

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