inventory-turnover

Vocabulary Word

Definition

'Inventory turnover' is how quickly a business sells its goods. A high turnover means items are selling fast, which is good. A low turnover means items are sitting around for a while before they sell.

Examples in Different Contexts

In Business Strategy, analyzing 'inventory turnover' helps companies understand their sales efficiency and product demand. A strategist might note, 'We aim to improve our inventory turnover by streamlining our supply chain and increasing marketing efforts.'

Practice Scenarios

Startup

Scenario:

Our company's core focus is on cash flow management. Keeping our inventory manageable and its quick replacement is the key decision.

Response:

Absolutely, maintaining a steady inventory turnover is vital. It can significantly influence our business's financial health.

Academics

Scenario:

Retailers like XYZ seem to have a clear strategy for managing their supplyside operations. They sell faster and restock efficiently.

Response:

Right. High inventory turnover is often a sign of effective business strategy, leading to higher profitability.