APICS Certified Supply Chain Professional (CSCP) — Question 482

A company sells 60 units of product in a given year and has an average quantity on hand of 10 units. What is the inventory turns ratio?

Answer options

• A. 0.16
• B. 6
• C. 60
• D. 600

Correct answer: B

Explanation

The inventory turns ratio is calculated by dividing the annual sales by the average inventory. In this case, 60 units sold divided by 10 units on hand results in an inventory turns ratio of 6. The other options do not accurately represent this calculation.