Tracking inventory Performance
Posted by Steven in Tracking inventory Performance
The real question behind inventory management is tracking inventory performance or turnover rate – the speed at which a company converts its investment in 
inventory into sales. To operate a business, you manufacture widgets. Inventory that doesn’t move is almost worse than no inventory at all because it because it becomes a financial liability on your books. Unless inventory has investment value – like fine wines, objects d’art or precious metals the faster it turns over the better. Turnover rate can be computed by dividing the cost of goods sold by the average inventory. Inventory turnover rates change throughout the year and good managers anticipate the fluctuations in their industry respond by stocking accordingly.
inventory into sales. To operate a business, you manufacture widgets. Inventory that doesn’t move is almost worse than no inventory at all because it because it becomes a financial liability on your books. Unless inventory has investment value – like fine wines, objects d’art or precious metals the faster it turns over the better. Turnover rate can be computed by dividing the cost of goods sold by the average inventory. Inventory turnover rates change throughout the year and good managers anticipate the fluctuations in their industry respond by stocking accordingly. 
