![]() Apple was able to get it down all the way to four days selling their iPhone! They had four days of inventory on-hand which means they had 25% of the cash tied up in inventory compared to Motorola. Tim Cook thought about that number and realized it wasn’t even good enough for Apple. At the time, the number one selling phone in America was the Motorola flip phone and it took Motorola about 15 days to go through their entire inventory which is extremely fast. It’s widely known that you should turn your inventory as fast as possible How many times should your inventory turn in a given year? That answer depends on the industry you’re in.įor example, when Steve Jobs was running Apple and Tim Cook came on as the COO when the iPhone first came out, his job was to get the operations, manufacturing and everything that involved the iPhone to run smoothly and efficiently. Your inventory should match your sales since it’s costing your money to hold onto inventory if it’s not being sold. On the other hand, a lower inventory turn means weaker sales and lower demand for what you’re selling. The higher the inventory turnover, the better because it means you are selling your products quickly and there is a demand for them. Inventory-based businesses know that when you carry a lot of inventory, it soaks up a lot of your cash. Inventory turnover is the rate at which a company replaces inventory in a given period due to sales.
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