A company is aggressively pursuing improvements in the financial performance of its supply chain.

The number of inventory turns is a key metric that measures how often a company’s inventory is sold and replaced over a period. It is a critical indicator of inventory management efficiency and directly impacts financial performance by influencing cash flow, carrying costs, and storage needs. By focusing on improving inventory turns, a company can reduce excess inventory, lower carrying costs, and free up capital for other uses. This can lead to improved profitability and better financial performance across the supply chain.

References:

Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). Supply Chain Management: A Logistics Perspective. Cengage Learning.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.