Inventory Management: Stay On Top of the Metrics

By looking at a few ratios, you can obtain a sense of direction. The ratios that follow should be looked at as a “package.” That is, only looking at one measure in isolation would result in incorrect conclusions.

First, look at the relationship by category or subcategory of the number of items (not SKUs) offered to the proportional revenue generated by that category, both historically and in terms of future plans.