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Learn how to use the "Inventory Rotation" Performance Indicator. This KPI is one of the most used when managing a warehouse.
Inventory turnover is the way to evaluate how often a company sells its physical products. The turnover rate tells the company if a product is selling quickly or slowly. That information helps the company make decisions.
Inventory turnover can help the company understand certain things, including if:
The price of the product must be adjusted
Purchase schedules must be changed
Manufacturing volumes should change
The promotion is necessary to sell the inventory
The rate of turnover is particularly important with perishable products such as fashion, which is constantly changing. Many pants today can mean unsold inventory (dead inventory) and financial losses tomorrow.
In addition, saving inventory is worth money that the inventory is not generating when it is stored in a warehouse or elsewhere. Unsold inventory can eventually become obsolete and can not be sold, causing financial responsibility for the company
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