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How To Improve Inventory Turnover Ratio

oboloo Glossary

How To Improve Inventory Turnover Ratio

Inventory turnover is a key ratio used in procurement to measure the efficiency of inventory management. It measures how many times per year a company sells and replaces its inventory. The higher the inventory turnover, the more efficiently a company’s inventory is managed. To improve inventory turnover, companies must ensure that they have the right products in stock when customers need them and that their processes are efficient so they can meet customer demand quickly. Companies should also review their ordering patterns and avoid overstocking or understocking their inventories. Lastly, companies should establish a better relationship with suppliers to ensure timely and consistent supply of products. With proper planning and effective strategies, companies can boost their inventory turnover and stay ahead of the competition!

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