Its time for me to analyze last years frame sales and I am not completely happy with the formulas I use. I am hoping someone with a deep business background can help me.

The Retail sector uses Inventory Turn Over Ratio to determine the best stock level of product to have (which varies by industry) but in eyewear we don't take into account the varied margins nor the value of the lenses, nor the higher labor and service we provide. The ratio is simply the units you sell vs. the units you have on hand, so if I have 300 frames on the board and sell 900 in a year, I have a 3:1 turn.

I have used a 3:1 ration for years as a goal but I believe I could be short changing myself (and under stocking my boards) by not considering the added margin of the lenses.

Is their a (simple?) formula available that would analyze turn over based on margins vs. cost and not on simple units?

Thanks,
Sharpstick