in simple, if there is more sales, then the inventory turn over ratio is high as these are a velocity parts and you can set a low reorder quantity as the volume churns out.
For example: Yr 1 inventory 100, revenues 1000, so turnover is 10. Yr 2 inventory 100, revenues 2000, so turnover is 20. Inventory qty remains same, but turnover goes up.
Not true. The inventory qty can remain the same or even increase and the turnover go up if the revenues during the period increase at a proportonately higher rate.
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