Definition
How many times a business sells and replaces its stock in a year, calculated as cost of goods sold divided by average inventory value. A turnover of 6 means stock sits roughly two months on average. Higher is usually better — less cash tied up and less obsolescence — but import businesses deliberately run lower turns than local buyers because long ocean lead times force bigger safety stocks.
Frequently asked questions
What is Inventory Turnover?
How many times a business sells and replaces its stock in a year, calculated as cost of goods sold divided by average inventory value. A turnover of 6 means stock sits roughly two months on average. Higher is usually better — less cash tied up and less obsolescence — but import businesses deliberately run lower turns than local buyers because long ocean lead times force bigger safety stocks.
Which glossary terms are related to Inventory Turnover?
Inventory Turnover is a supply chain & warehousing term in the South African import/export industry. Related terms in the same area include 3PL (Third-Party Logistics), 4PL (Fourth-Party Logistics), ABC Analysis, Bonded Logistics, Bonded Warehouse (SOS/OS) — each has its own plain-English definition in the TradeCaravan glossary.