Inventory Turnover (Finished Goods Only)
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Inventory Turnover (Finished Goods Only). Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is Inventory Turnover (Finished Goods Only)?
An indication of how many times a company's inventory of finished goods is sold and replaced over a set period of time. Can be calculated by dividing the cost of goods sold (COGS) by the average dollar value of finished goods on hand during a defined selling period (monthly, quarterly, annually).
Why should Inventory Turnover (Finished Goods Only) be measured?
Inventory Turnover (Finished Goods Only) measures the rate at which a company's inventory of finished goods is sold and replaced (i.e., "turned") over a given period of time. A relatively high value for this KPI indicates that the company's inventory of finished goods is turned several times throughout the measurement period, but may also be a leading indicator of potential for backorders and/or a lack of cost avoidance within the procurement function (i.e., purchasing in bulk to replenish inventory of finished goods, when possible, to reduce procurement costs). On the other hand, a relatively low value may indicate that the organization's purchasing/procurement, sales and related forecasting functions are not working in concert to determine the appropriate inventory levels of finished goods based on forecasted demand.
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