Economic retention less than 100 can be indicative of what?

When economic retention is less than 100, it typically indicates that the inventory turnover is not occurring at an optimal rate. A value below 100 suggests that the organization is less effective at converting inventory into sales, meaning that products are not being sold quickly enough compared to how much inventory is being held. This can lead to high carrying costs and may suggest inefficient inventory management practices.

In this context, deficient inventory turnover points to potential problems such as overstocking or inadequate marketing strategy, which can inhibit product sales. By monitoring economic retention closely, organizations can identify issues in their inventory management practices and take appropriate actions to streamline operations and enhance sales performance.