When core products are under price pressure, it is absolutely essential to get the full order, including fringe items where margins are more attractive. The chart specifically assumes that no expense reductions can be generated. For firms that are truly attuned to the intricacies of gross margin management, it is an attainable reality, even in the midst of an economic downturn. Far too many firms approach asset utilization the wrong way in a recession. In particular, they attempt to reduce inventory and curtail credit terms, both of which are counterproductive.
Inventory turnover is virtually impossible to improve during a recession.
In an attempt to do something about turnover, many firms simply stop buying. Other firms try to reduce dead inventory. This is a great idea in good times. In recessions, though, nobody wants to buy somebody else's problems. It is not suggested that firms just let inventory slide.