What is one of the main drivers of inventory turnover?

Customer demand is a primary driver of inventory turnover because it directly influences how quickly products are sold and replenished. When customer demand is high, businesses sell their inventory more rapidly, leading to a higher turnover rate. This means that companies must be agile and responsive to changing consumer preferences and market conditions to maintain optimal inventory levels.

High customer demand encourages efficient inventory management practices, enabling organizations to avoid over-stocking and under-stocking situations. Additionally, it prompts businesses to analyze sales trends and adjust purchasing and production strategies accordingly, ensuring that inventory aligns with current and future demand. Thus, understanding customer demand is crucial for maximizing inventory turnover and enhancing overall supply chain efficiency.