Certified Logistics Associate (CLA) Practice Test 2025 – All-in-One Guide for Exam Success!

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What is inventory turnover?

A measurement of warehouse efficiency

A measure of how often inventory is sold and replaced

Inventory turnover is a measure of how often inventory is sold and replaced within a specific period, typically a year. This metric is crucial for understanding the efficiency of inventory management within a business. A high inventory turnover indicates that a company is selling goods quickly and may have a strong sales performance, while a low turnover can suggest overstocking or weak sales.

This concept directly relates to how effectively a business manages its inventory levels in relation to its sales. By analyzing inventory turnover, companies can optimize their stock levels to align better with consumer demand, ultimately improving cash flow and profitability.

The other options focus on different aspects of logistics and warehouse management, such as warehouse efficiency, product pricing strategies, and storage time, which do not directly define the concept of inventory turnover.

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A technique for pricing products

The average time products are stored in a warehouse

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