Personally, I rely on the utilization rate as a key KPI to track inventory turnover. In my case, I measure the percentage of our fleet that is rented out at any given time, aiming to keep it above 85%. If the rate drops below that for more than two weeks, we reassess demand forecasts and consider offloading underused vehicles. When it rises above 95% for extended periods, we look at expanding the fleet to avoid turning customers away. This approach has helped reduce unnecessary holding costs by nearly 20% while ensuring we meet customer demand without overextending resources.
Tracking DOH helped me determine if inventory is moving too slowly (tying up cash flow) or too quickly (risking stockouts). If DOH is too high, I look at demand forecasting, promotions, or bundling slow-moving items to improve turnover. If DOH is too low, I may adjust ordering strategies or supplier lead times to prevent stock shortages.