Which of the Following Statements Does NOT Represent a Positive

question 78

Multiple Choice

Which of the following statements does NOT represent a positive link between supply chain performance and the financial status of a firm?

• A) Lowering the cost of purchased materials reduces the level of working capital required and has a positive impact on the contribution margin.
• B) Reduced inventory levels result in an increase in the percentage of partial orders shipped and an increased inventory turnover ratio.
• C) Percentage of orders shipped on time reduces the level of working capital required and supports increased sales.
• D) Reducing supplier lead times reduces the level of working capital required.

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Definitions:

Perpetual Inventory Method

A system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Accounts Payable-Emma Co.

The amount of money Emma Co. owes to its suppliers or creditors for items or services purchased on credit.

Debit Balance

A financial situation where the total debits exceed the total credits in an account, resulting in a positive account balance.

Inventory

Assets held for sale in the ordinary course of business, as well as materials and supplies used in producing goods available for sale.