The goal of inventory control is to keep the smallest possible amount of supplies in the health care facility, while not running out of critical items. One parameter that can aid towards reaching this goal is to determine the turnover of supplies in each department.
turnover =
= (annual dollar amount of the supplies) / (average inventory value)
Interpretation:
• Turnover for supplies varies between departments. Some departments have very slow turnover rates, while others such as dietary services may have very high turnover rates.
• As a rough guide, the inventory should turnover about 12 times per year (once a month).
• If a department has a low turnover rate, then it may be reasonable to reduce the amount of stock on hand in slow moving items.
• If a department has a high turnover rate, then a larger order for nonperishable supplies may be cost-effective.
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