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What Is Inventory Turns or Inventory Turnover?

Understand how Inventory Turnover fits into the supply chain

Inventory turnover refers to the number of times inventory has been sold or used then replaced in a specified amount of time. A higher inventory turnover rate means that a company's capital is being used and less capital is required due to the profit of inventory being sold. It also helps to maintain price stability since a company does not need to host sales in order to get rid of excess inventory. Instead, it allows for products to be sold at a steadier price.