Abstract
In this paper, the determinants (return gross margin on inventory, return gross margin on sales, inventory turnover ratio, firm size, capital intensity) of inventory management efficiency in Serbian trade are investigated. An econometric approach is used. The research established that the key factors in the efficiency of inventory management in Serbian trade are: return gross margin on sales (gross margin/sales) and inventory turnover ratio (sales/inventories). Their effective control can achieve the target profit of food retailers in Serbia.