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Which defines turnover rate in reference to inventory?

(A) Most popular product used in facility
(B) # of times specific product turns over
(C) How quickly the product will expire
(D) Time it take to receive product after purchase

User NineBerry
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1 Answer

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Final answer:

Inventory turnover rate is defined as the number of times a specific product is sold and replaced in a given period, indicating the frequency of inventory cycle through sales.

Step-by-step explanation:

The turnover rate in reference to inventory refers to (B) the number of times a specific product turns over in a given period. This rate indicates how often the inventory is sold and replaced. A high turnover rate suggests that inventory moves quickly, which is typically positive as it implies strong sales and lower holding costs. Conversely, a low turnover rate can suggest poor sales, excess inventory, or potentially issues with the product quality or market demand. For clarity, (A) the most popular product used in a facility does not define turnover rate, nor does (C) how quickly the product will expire or (D) the time it takes to receive product after purchase. Rather, it's specifically about the frequency of inventory cycling through sales. Understanding the concept of turnover rate can be critical for business operations, impacting decisions related to purchasing, production, and marketing strategies to align with consumer demand and maximize profitability.

User Ncesar
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