Turnover Rate, also known as Inventory Turnover, measures how many times inventory is sold and replaced within a specific period, typically a year. It reflects how efficiently a company manages its stock relative to sales.A high turnover rate indicates effective inventory management, reducing holding costs and risk of obsolescence. Conversely, a low turnover rate may suggest overstocking or slow-moving products. Optimizing turnover rates involves balancing demand forecasting, replenishment timing, and inventory classification to maintain adequate stock while minimizing excess.
