The correct answer is: A. average inventory.
The inventory turnover ratio is a measure of how efficiently a company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory held during the period. A higher inventory turnover ratio indicates that a company is selling its inventory more quickly, which can be a sign of good management.
Average inventory is the sum of the beginning and ending inventory balances divided by 2. It is a more accurate measure of inventory levels than either the beginning or ending inventory balance alone.
Minimum inventory is the lowest level of inventory that a company needs to maintain in order to meet customer demand. Maximum inventory is the highest level of inventory that a company can afford to carry.
Neither minimum nor maximum inventory are used to calculate the inventory turnover ratio.