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NOTE: The importance of Inventory Turns as a means of improving distributor profitability cannot
be overstated. Increases in inventory turnover drive lower carrying costs and higher service levels,
and free up working capital for more productive uses. The Case Study presented in Chapter 4
provides more detail, and highlights several “unforeseen benefits” that can arise from improved
inventory turns.
A Final Comment
It is easy for distributors to assume that “buying direct” is the best option whenever it can be achieved.
This model allows distributors to test that assumption on potential new lines, as well as existing lines that
are being purchased direct from the manufacturer. As one Jan-San distributor puts it, “Just because I CAN
buy direct doesn’t mean I SHOULD!”
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