Glossary
Inventory turns
How many times you sell through and replace inventory in a year.
Technical definition
A ratio of cost of goods sold to average inventory value over a period.
Formula
Inventory turns = COGS ÷ average inventory
Manufacturing example
COGS of $120M against $20M average inventory is six turns per year.
Common misconception
Higher turns are not always better; pushed too far they raise stockout risk.
Why it matters operationally
Turns measure how efficiently working capital is deployed in inventory.
Related ConstraintFlow capability
Related terms
Put inventory turns to work
See how ConstraintFlow turns operational concepts into optimized decisions.