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Logistics & Supply Chain vocabulary · Inventory Management

Inventory turnover

Meaning in logistics & supply chain, with examples

nounCommon term

In logistics & supply chain, inventory turnover means: A measure of how many times a company sells and replaces its stock in a period, usually cost of goods sold divided by average inventory.

In Turkish: stok devir hızı, stok devir oranı

How it is used

A higher turnover usually means stock moves fast and less cash is tied up; a low one can point to overstock or slow-moving items. Also called stock turnover or inventory turns; the related figure 'days of inventory' shows how many days the stock would last.

Example sentences

  1. Our inventory turnover is eight, which means stock is replaced roughly every six weeks.

  2. Finance wants to improve inventory turnover by cutting slow-moving SKUs.

Common collocations

  • inventory turnover ratio
  • improve inventory turnover
  • high inventory turnover
  • inventory turns
  • inventoryAll the goods and materials a company holds at a given time, including raw materials, work in progress and finished products.
  • SKUShort for stock keeping unit: a unique code for one specific version of a product, so that each size, colour or pack type can be counted and tracked separately.
  • safety stockExtra stock kept on top of expected demand to protect against sudden increases in demand or late deliveries from suppliers.
  • cycle countA stock check in which a small part of the warehouse is counted on a regular schedule, so that all items are counted over time without closing the warehouse.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Inventory Management

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