slow Archives — freightos.com

Determining the value and quantity of inventory that sees infrequent sales is crucial for effective inventory management. For example, analyzing sales data over a specific period, perhaps a year, can identify items with low turnover rates. This analysis often involves comparing the quantity of each item sold against the quantity held in stock. This process helps businesses understand the financial impact of holding onto these items.

Managing inventory with low turnover is essential for maintaining a healthy financial position. Accurately assessing this type of inventory allows businesses to optimize storage space, minimize losses from obsolescence or spoilage, and free up capital tied up in unproductive assets. Historically, this analysis has been performed manually, but modern inventory management software and advanced analytics now offer more efficient and accurate methods. This evolution has enabled more proactive and data-driven decision-making regarding inventory control.

Calculate Slow Moving Inventory + Free Tool

Determining the value of goods that experience low turnover rates is a critical aspect of inventory management. This process typically involves analyzing sales data over a specific period, identifying items with minimal sales activity, and often applying valuation adjustments to reflect their diminished market value. For example, a retailer might analyze sales data for the past year, identifying winter coats that remained unsold during the spring and summer months. These items might then be re-evaluated at a lower price to reflect their reduced desirability and potential for future sales.

Accurate valuation of these assets provides businesses with a more realistic understanding of their financial position, enabling informed decision-making about pricing, promotions, and future inventory orders. Historically, this process was labor-intensive, often relying on manual calculations and estimations. However, modern inventory management systems provide automated solutions for tracking sales velocity and calculating potential write-downs, leading to increased efficiency and accuracy in financial reporting. This insight can prevent overstocking, minimize storage costs, and free up capital for more profitable investments.