Question

what are characteristics of long operating inventory cycles and how does that effect inventory turnover?

Answer 1

Long operating Cycle stock inventory is among the most important parts of an overall inventory since it's the first place customer purchases will come from.

It is part of on-hand inventory, which includes all of the items that a seller has in its possession.

For example, a retailer's on-hand inventory would include the items on store shelves as well as most of those in a store room or stock area. Over time, cycle stock inventory refreshes itself, or turns over, as new items replace older ones that are sold.

Characteristics of long operating inventory cycles

• Design:-

Individual design, feature set and operations

• Count:-

The most fundamental part of an inventory system counts how many units a company has in stock

• Tracking:-

Inventory moves throughout a facility or between multiple facilities. To provide an accurate inventory count, an inventory system must track the movement from one location to another.

• Recording/Accounting:-

These transactions include receiving inventory into the system, reducing inventory from usage either through sales or when it’s consumed for production and writing inventory off the balance sheet due to loss or damage. Most companies limit the personnel allowed to record inventory transactions. If done incorrectly it can lead to financial headaches and inaccurate inventory numbers.

   

            

Effect inventory turnover:-

The ability to manage the inventory’s characteristics serves as another function of inventory systems. Inventory characteristics include how much inventory to order, the order cycle, which is how often to place orders for the product; as well as supplier information, product cost, product lead time, minimum and maximum order quantities, lot-size availability, product unit of measure (pieces, each, tons, bags) and other product characteristics, such as country of origin and manufacturer’s reference number.