Which of the Following Would Cause Average Inventory Holdings to Decrease

question 8

Multiple Choice

Which of the following would cause average inventory holdings to decrease, other things held constant?

• A) Fixed order costs double.
• B) The purchase price of inventory items decreases by 50 percent.
• C) The carrying price of an item decreases (as a percent of purchase price).
• D) The sales forecast is revised downward by 10 percent.
• E) None of the above (all would cause average inventory to increase).