Having Attended a Management Seminar,the Owner of a Small Manufacturing

question 104

Multiple Choice

Having attended a management seminar,the owner of a small manufacturing firm is considering using a just-in-time inventory system.Which of the following may be a source of difficulty?

• A) a lack of clout in dealing with suppliers
• B) the absence of a retail inventory valuation method
• C) allocating freed up inventory space
• D) the small variety of products that are manufactured

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Definitions:

Obligations

Legal or financial duties or commitments that an entity is required to fulfill, such as paying debts or performing certain actions.

Profitability

The ability of a company to generate earnings as compared to its expenses and other relevant costs.

Order of Liquidity

The arrangement of assets on a balance sheet in descending order of how quickly they can be converted into cash.