Inventory Turnover
Category: Inventory
Also searched as: Inventory Turnover
Definition (plain English)
Inventory turnover measures how often stock is sold or used over a period, usually by comparing cost of goods sold with average inventory.
Why it matters commercially
Turnover shows whether MOQ, lead time, safety stock, and buying cycles are tying up too much cash or creating slow-moving and expiry risk.
Example
A product had strong gross margin but turned only twice per year, so finance rejected a larger MOQ that would trap cash and warehouse space.
Common mistake
Looking at turnover without separating fast and slow SKUs, seasonal demand, shelf-life, channel commitments, and stock bought for one-off promotions.
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