Inventory turnover measures how many times a company sells and replaces its stock in a given period. A higher ratio means inventory is sold quickly; a lower ratio suggests slow-moving stock, potential obsolescence, or overstocking.
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Pro Tip
High turnover is good, but not if it means frequent stockouts. Pair inventory turnover with fill rate (% of orders fulfilled from stock) for a complete picture.
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Did You Know?
Walmart achieves over 8x inventory turnover, meaning it sells its entire stock every ~45 days — a key competitive advantage over slower-moving retailers.
References
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