Stock turns four times a year. Two thirds of the lines turn once.

An aggregate inventory turn is the average of two businesses sharing one warehouse, and only one of them is earning its keep.

By Steve 5 min read
Abstract bridge artwork for Stock turns four times a year. Two thirds of the lines turn once.

A stock turn of four sounds like a diagnosis. It is closer to a rumour. Divide cost of sales by average inventory and you get a single number that describes no actual product in the building. In most distribution and manufacturing businesses, that number is the average of two quite different populations: a small group of lines that move constantly and would embarrass the aggregate if measured alone, and a long tail that has been sitting in the same bay since before the last price list. The distinction matters because…

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