Rate of inventory turns

This ratio indicates how often the inventory turned over per year. It is derived for each reference number using the equation 

If inventory turns determined in this way are arranged in ascending order, those reference numbers will be listed at the beginning of the analysis which turn over very rarely and at the end, the fast-selling merchandise. 

A low rate of turnover burdens the individually stored part with high inventory costs (long dwelling time in storage). 

The rate of turnover for all reference numbers is a measure of the quality of the overall inventory policies. Do not forget the Schmalenbach s sloppiness motto  

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