inventory turn

inventory turn is a key performance indicator (KPI) used in inventory management to measure how many times a company’s inventory is sold and replaced over a period. This metric is crucial for understanding the efficiency of inventory management and for assessing the performance of sales. A high inventory turn ratio typically indicates that a company is selling products quickly and efficiently, which can lead to lower holding costs and better cash flow. On the other hand, a low inventory turn ratio may suggest overstocking, slow-moving goods, or potential issues in demand forecasting. Calculating and analyzing inventory turns is vital for businesses aiming to optimize their stock levels and reduce operational costs.