Inventory Turnover
Inventory Management
Inventory Turnover
Annual cost of goods sold or usage divided by average inventory; indicates how often inventory cycles through.
Examples
- 01With COGS of EUR 30 million and average inventory of EUR 6 million, inventory turnover is 5 times per year.
- 02The material planner reviews inventory turnover by item class and finds that spare parts turn only 1.2 times a year.
- 03Raising inventory turnover from 5 to 7 frees about EUR 1.7 million of working capital at the same service level.