What Does Inventory Turnover Measure? What Does a Low Rate

question 135

Essay

What does inventory turnover measure? What does a low rate of inventory turnover indicate?

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Definitions:

Profit Center

A segment or unit within an organization that is responsible for generating its own revenue and tracking its own costs.

Company Personnel Department

The segment of a business organization that handles hiring, training, employee relations, and benefits administration.

Cost Center

A unit within an organization that does not directly add to profit but still incurs costs, such as a department or project, which needs to be monitored for internal efficiency.

Generates Revenues

The process of bringing in income from business activities, such as sales of goods or services.