What does a lower turn rate indicate about a retailer's inventory?

What does a lower turn rate indicate about a retailer's inventory?

• A. Inventory moves quickly
• B. Inventory is stagnant
• C. Inventory is replenished frequently
• D. Inventory is selling out

Answer: (B)

A lower turn rate indicates that inventory is not selling quickly, suggesting that products are sitting on the shelves for a longer period than desired. This stagnation means that the retailer may be overstocked or that demand for the items is weak, leading to reduced sales velocity. Thus, a lower inventory turnover reflects potential issues with product selection, pricing, or marketing strategies, causing inventory to remain unsold for extended periods. This insight can help retailers assess their stock levels and make necessary adjustments to improve sales and inventory management.

A lower turn rate indicates that inventory is not selling quickly, suggesting that products are sitting on the shelves for a longer period than desired. This stagnation means that the retailer may be overstocked or that demand for the items is weak, leading to reduced sales velocity. Thus, a lower inventory turnover reflects potential issues with product selection, pricing, or marketing strategies, causing inventory to remain unsold for extended periods. This insight can help retailers assess their stock levels and make necessary adjustments to improve sales and inventory management.