When computing Inventory turnover should one add in raw materials and work in process?
Inventory Turnover
May 03, 2006
2 Replies
The purpose of the Inventory Turnover is to highlight inefficiencies in inventory management. If you leave out RM and WIP you would not be seeing the total picture.
Rusty
Or you might compute it in subgroups. How quickly are you turning over raw material and how quickly are you turning over WIP. Do you have standards for them separately. Just adds an additional level of information.
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