Which of the following metrics compares the cost of goods sold (COGS) for a period...

Inventory turnover is a key performance metric in supply chain management that compares the cost of goods sold (COGS) during a period to the average inventory cost for the same period. It measures how many times a company's inventory is sold and replaced over a period.

Calculation: Inventory Turnover = COGS / Average Inventory

Importance: High inventory turnover indicates efficient inventory management, suggesting that goods are sold quickly and not sitting in storage.

Average Inventory: Calculated as (Beginning Inventory + Ending Inventory) / 2.

Application: Helps in assessing the liquidity of inventory, efficiency in managing stock, and effectiveness in sales strategies.

References:

"Principles of Inventory Management: When You Are Down to Four, Order More" by John A. Muckstadt

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