Why should a salon track inventory turnover?

• A. To determine employee profitability.
• B. To forecast cash inflows.
• C. To prevent stockouts and reduce excess carrying costs.
• D. To set service protocols.

Answer: (C)

Tracking inventory turnover is about balancing how quickly products move in and out of the salon. By watching how often you sell through your stock in a period, you learn when to reorder and how much to buy. The goal is to prevent stockouts—running out of items clients expect to use—and to reduce carrying costs from keeping slow-moving inventory on shelves or in storage. When turnover is well managed, purchases align with demand, products stay fresh, and cash isn’t tied up in unused stock. This supports consistent service availability and better profitability. It’s not primarily about measuring employee profitability, predicting cash inflows as the main focus, or establishing service protocols, which are related to different aspects of operations.