What is Inventory Turnover in SAP MM-FIO-IM - Fiori UI for Inventory Management?

SAP Term: Inventory Turnover

• Component: MM-FIO-IM

• Component Name: Fiori UI for Inventory Management

• Description: A KPI that determines how often the average material was destocked and restocked in a specific time frame. A high inventory turnover indicates that materials are not in storage for a long time and that storage costs are low. With this KPI warehouse managers receive important information about special materials or material groups.

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• Key Concepts: 
  Inventory turnover is a measure of how quickly a company is selling and replacing its inventory. It is calculated by dividing the cost of goods sold (COGS) by the average inventory for a given period. A higher inventory turnover ratio indicates that the company is efficiently managing its inventory and selling its products quickly. 
  
  How to use it: 
  The MM-FIO-IM Fiori UI for Inventory Management allows users to view and manage their inventory in real-time. This includes tracking inventory levels, setting reorder points, and monitoring stock movements. The UI also provides insights into inventory turnover, allowing users to identify trends and make informed decisions about their inventory management strategies. 
  
  Tips & Tricks: 
  To maximize inventory turnover, it is important to ensure that the right amount of stock is available at all times. This can be achieved by setting accurate reorder points and monitoring stock movements closely. Additionally, it is important to ensure that products are priced correctly in order to maximize sales and minimize excess stock. 
  
  Related Information: 
  Inventory turnover is closely related to other key performance indicators such as gross margin, days sales outstanding, and return on investment. It is important to consider these metrics when evaluating the performance of a company’s inventory management strategies. Additionally, it is important to consider external factors such as market conditions and customer demand when making decisions about inventory levels.