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How To Use Inventory Turns Per Year To Improve Your Business

How To Use Inventory Turns Per Year To Improve Your Business

Inventory turnover, or inventory turns, measures the number of times inventory is sold or used in a time period such as a year. The average number of inventory turns for a manufacturing company is 10 inventory turns per year. That means the company sells or uses 10 times the amount of inventory it has on hand during a one-year period.

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Inventory turnover is a good way to measure how efficient a company is at using its inventory. A company that has a high inventory turnover is generally more efficient than a company with a low inventory turnover.

There are a few ways to improve your inventory turnover:

Increase sales. This is the most obvious way to improve inventory turnover. If you can sell more of your product, you will need to replenish your inventory less often.

Reduce the amount of inventory you have on hand. This can be done by reducing the number of SKUs (stock keeping units) you carry, or by reducing the quantity of each SKU you keep in stock.

Improve your inventory management. This includes things like better forecasting, just-in-time inventory, and better warehouse management.

Use consignment inventory. This is where you store your inventory at your supplier’s warehouse and only pay for it when you sell it. This can help reduce the amount of inventory you need to carry.

Use drop shipping. This is where you ship your products directly from your supplier to your customer. This can also help reduce the amount of inventory you need to carry.

Improving your inventory turnover can be a great way to improve your business. It can help you reduce your inventory costs and improve your profitability.

About the Author: Linda Clevenger

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