Increasing inventory turnover is an important goal for a retail manager. What are the consequences of turnover
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A low inventory turnover relative to industry standards in retail means that your product is sitting on the shelf too long it is not being sold The tw...View the full answer
Retailing Management
ISBN: 978-0070893207
4th Canadian Edition
Authors: Michael Levy, Barton Weitz, Dea Watson
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Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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Simply speaking, increasing inventory turnover is an important goal for a retail manager. What are the consequences of turnover thats too slow? Too fast?
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