Inventory Turnover paper

Inventory Turnover
Name
Institution
Inventory Turnover
Inventory turnover is the ratio that shows the rate of the times a company has sold and replaced an inventory during a given period. With this, the company can then find the number of days to resell the stock on hand. The perfect scenario for any given company is to have zero inventory (Hançerlioğulları et al., 2016). However, this, in a practical sense, is impossible to achieve, because of several factors. Despite the possibly unattainable highs, companies still pull all their resources as they strive to come close.
Retail industries, for instance, are very interested in finding a way through which they can achieve zero inventory. Having excess stock is sometimes not good for the development of an organization because it ties up most of the company’s funds. As such, the cash flow within an organization is hindered hence reducing its ability to expand and gain more revenue. Although it is not always the case, the probability of the disadvantages mentioned above is very high.
For zero inventory to work, or rather the goods should be supplied on actual consumption. To ensure that processes work at their optimum level, companies need a detailed view of all the suppliers throughout the business chain. Theoretically, this seems like something that can be done without any issues. However, in the field, it is almost impossible to track each supplier. It is, therefore, not easy to find a state of zero inventory because all the factors may not be met.

In conclusion, the perfect scenario for any business enterprise is usually near impossible to meet. However, by working towards perfection, a company may be able to come close to the same.
Reference
Hançerlioğulları, G., Şen, A., & Aktunç, E. A. (2016). Demand uncertainty and inventory turnover performance: An empirical analysis of the US retail industry. International Journal of Physical Distribution & Logistics Management, 46(6/7), 681-708.