A company finds that one of its warehouses is out of capacity to store products.

When a warehouse reaches its capacity and expanding the physical space is not an option, increasing the inventory turn of slow-moving items is the most appropriate solution. Here’s why:

Inventory Turn: This measures how frequently inventory is sold and replaced over a period. Increasing inventory turn means reducing the amount of time products stay in the warehouse.

Slow-Moving Items: These items contribute significantly to storage space issues. By focusing on increasing the turn rate of these items, you can free up space for faster-moving goods.

Efficient Use of Space: By increasing the turnover of slow-moving items, you avoid the need for additional storage space and ensure that the warehouse is utilized more effectively.

Improved Cash Flow: Higher inventory turnover rates help in converting stock into cash more quickly, improving the company's liquidity. In essence, managing slow-moving inventory more efficiently helps to optimize the use of existing warehouse space without the need for physical expansion.References

"Inventory Management Strategies to Reduce Warehouse Costs" - Supply Chain Quarterly

"Improving Inventory Turnover Rates" - Journal of Business Logistics