← Back to glossary Category: Logistică Inventory turnover Quick answer: How many times stock is fully sold and replenished in a period — a measure of capital efficiency. Key takeawaysHigh turnover — fast sales, capital freed, but stockout riskLow turnover — overstock, locked capital, expiry/obsolescence risk What inventory turnover is Inventory turnover shows how many times stock is sold and renewed in a period. Common formula: Cost of goods sold / Average inventory. High turnover = efficient capital; low turnover = money locked in goods. How to interpret it High turnover — fast sales, capital freed, but stockout risk Low turnover — overstock, locked capital, expiry/obsolescence risk The benchmark varies widely by industry (fast FMCG vs slow equipment). Link to cash flow Turnover is a direct cash-flow lever: each extra day of stock means locked capital. Reducing DIO (days inventory outstanding) frees money without lowering sales, if done per SKU. How Azuvio helps Combining sales from all channels with WMS stock, Azuvio computes turnover per SKU, identifies slow movers (dead stock) and fast movers, and optimises replenishment to maximise turnover without stockouts. Frequently askedHow is inventory turnover calculated?Turnover = Cost of goods sold (COGS) / Average inventory over the period. It can also be expressed in days: DIO = 365 / turnover = how many days goods stay in stock on average.Is high turnover always good?Not necessarily. Too high can mean insufficient safety stock and stockouts. The goal is balance: good turnover without compromising service level.How do I improve turnover without stockouts?By analysing per SKU, not globally: cut stock on slow movers, keep a buffer on fast movers, and sync replenishment with real demand across all channels. Where Azuvio fitsSoftware WMSSoftware OMSConectori ERP Related termsDead stock — Goods unsold for a long period that lock capital and space, with little prospect of selling at normal price.Safety stock — Extra buffer inventory held to prevent stockouts caused by demand or supply variability.Cash flow — The actual movement of money in and out of a company over a period — a measure of liquidity, not profit.Slotting — Strategically assigning products to warehouse locations based on rotation, size and affinity to minimise picking effort. Last updated: 2026-07-06