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Glossary Supply Chain / Term

inventory turnover

An inventory investment and activity measure that compares inventory usage (as defined by the annual cost of goods sold) divided by the inventory investment (as defined as the average inventory level at standard cost). Higher values indicate a more efficient use of inventory; absolute targets can only be set based on relevant industry figures, as the turnover for grocery chains is vastly different than for capital goods manufacturers.

Permanent link inventory turnover - Creation date 2021-11-03


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