Question

___ is a measure of how often inventories are depleted and replenished over the course of a given time period.

a) inventory turnover
b) dwell time
c) in-stock rate
d) fill rate

Answer 1

Inventory turnover is a measure of how often inventories are depleted and replenished over a given time period. It is calculated by dividing the cost of goods sold by the average inventory value.

Step-by-step explanation:

Inventory turnover is a measure of how often inventories are depleted and replenished over the course of a given time period. It is calculated by dividing the cost of goods sold by the average inventory value. A high inventory turnover indicates efficient inventory management, while a low turnover suggests that inventory is not being sold quickly.

For example, let's say a company has a cost of goods sold of $500,000 and an average inventory value of $100,000. The inventory turnover would be 5 ($500,000 / $100,000), meaning the company sells and replenishes its inventory five times per year.

Other options mentioned in the question, such as dwell time, in-stock rate, and fill rate, are related to inventory management but do not specifically measure the frequency of inventory depletion and replenishment.