The benefits of inventory include having adequate stock on hand, a wide assortment, low cost volume purchases, etc. Maintain a wide assortment but keep an adequate supply of those items with quick turnover. Increase turnover but don't sacrifice service level. Make volume purchases for lower prices, but don't end up with slow moving inventory. Have plenty of inventory on hand, but don't get stuck with obsolete items.
Many industries rely on a ratio which measures inventory turnover rate.
Inventory Turnover Rate can be calculated in various ways, providing a rough guideline by which managers can set goals and measure performance. Business Shareware Shareware from the SBA Using Your Computer for Inventory Control FREE and low-cost assistance for small businesses is available from your local Small Business Development Center . This document was prepared by the San Joaquin Delta College Small Business Development Center .