when calculating a three month inventory average the shoe company achieves the average by adding the current inventory of 10 000 to the previous three months of inventory recorded as 9 000 8 500 and 12 000 and dividing it by the number of data points as follows 
average inventory 10 000 9 000 8 500 12 000 4this results in an average inventory of 9 875 over the time period being examined 