Prakash Kumar

Resource and time are the two limited commodities. Resource can be in form of effort or money – it means investment. Investment made in expectation of some return.

Fascinating relationship of investment and return makes concept of “inventory” very significant and make no mistake “inventory turnover as a concept” can be applied to all businesses and walks of life.

Every penny a person invests and every second a person work is done with a particular objective. Time value of money teaches us- that a penny today is more than a penny tomorrow and same goes for effort as well. What would make such a correlation significant is that both penny and one second of effort are quantifiable.

One would like to invest one penny today to expect two pennies tomorrow and similarly one would spend few hours of effort today for some quantifiable gain tomorrow. It is one’s own prerogative – which opportunity one chooses, to invest the precious penny or the precious second of effort.

Simple law of economics would suggest that, one would invest the penny or the second of effort in investment/initiatives which gives a better result amongst other available options. Here lies the concept of inventory turnover.

One penny invested today is “inventory” till it bears the right result and same goes true for one second of effort invested in a particular initiative.

To make the right choice amongst a pool of opportunities is thus no less than a strategic business decision. It is thus imperative to make choices- in such a way that inventory turnover of the precious penny and precious one second of effort is high. A real time example can be a person selection a handful of equities over millions of equities and/or other financial instruments available to him/her.

Ultimately this will go a long way in scaling the “net worth” faster. It’s all about inventory.