Use this window to calculate part turnover rates. Inventory turnover is a ratio that measures the company's effectiveness by dividing the cost of goods sold (Issued Value) by the average inventory balance (Average Inventory Value). Since the issued value represents the inventory that leaves the company, the ratio allows the planner or controller to see how frequently the company needs to replenish its existing inventory.
Generally a higher number is better. However, a number too high might suggest the company is selling goods faster than it can be replenished. If a company runs out of a particular item it risks losing sales to a competitor who has the item in stock.