ENTREPRENEURIAL OPERATIONS
SUPPLY CHAIN MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Inventory Turnover ratio measures how many times or how fast inventory is turn to the customers relative to those kept in the warehouse
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True
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False
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -The inventory turnover ratio formula is equal to the cost of goods sold divided by total or average inventory to show how many times inventory is “turned” or sold during a period. The ratio can be used to determine if there are excessive inventory levels compared to sales.
Detailed explanation-2: -A company’s inventory turnover ratio reveals the number of times a company turned over its inventory relative to its COGS in a given time period. This ratio is useful to a business in guiding its decisions regarding pricing, manufacturing, marketing, and purchasing. It is of particular importance in retail.
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