A Company Decides to Reduce Its Number of Distribution Centers

question 12

Multiple Choice

A company decides to reduce its number of distribution centers (logistically postpone) .This decision would result in ___________ or __________.

• A)Poorer service to customers or higher transportation cost
• B)Better service to customers or less transportation cost
• C)Better service to customers or higher transportation cost
• D)Confusion for customers or for the company

Realize the effects of LIFO liquidation on financial statements and its reporting requirements.

Analyze how inventory accounting methods affect financial ratios and statements, and the adjustments needed for fair comparison.

Appreciate the regulatory requirements for inventory accounting disclosure under GAAP and SEC rules.

Understand the implications of using LIFO and FIFO accounting methods on inventory management and financial statements.

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Definitions:

Shortsightedness Effect

The shortsightedness effect refers to the tendency of decision-makers to prioritize short-term gains over long-term outcomes, often leading to suboptimal results.

Immediate Benefits

Advantages or gains that can be realized in the near term without significant delay.

Distant Future

A period of time that is significantly far ahead from the present moment.

Logrolling

In politics, the practice of exchanging favors, especially in legislative bodies, by reciprocal voting for each other's proposed legislation.