Inventory turnover measures what aspect of inventory management?

Inventory turnover specifically gauges how quickly inventory is sold and replaced over a given period, typically a year. It provides valuable insight into the efficiency of inventory management by indicating how effectively a company converts its stock into sales. A higher inventory turnover rate suggests that a company is selling goods quickly, which is generally a positive indicator of operational performance and demand for the products. This metric helps businesses assess their inventory levels and align them with sales trends, enabling better management and forecasting.

In contrast, the other choices focus on different aspects of inventory management that do not directly quantify the speed at which inventory is sold. For example, measuring how often inventory is ordered pertains more to procurement processes rather than sales efficiency. Production quantities or the percentage of lost inventory address operational challenges but do not relate to the turnover of inventory in the context of sales.