Describe the Inventory Function That a Firm Is Relying on When

question 65

Essay

Describe the inventory function that a firm is relying on when it purchases inventory in advance of expected high demand. Give at least one example of this type of inventory management decision.

---

Definitions:

Callable Bond

A type of bond that the issuer has the right to repay before its maturity date, at a predetermined call price.

Sinking Fund

A reserve fund established by a company to repay debt or replace a major asset in the future.

Income Bond

A type of bond that only pays interest if the issuing corporation has earned enough income to cover the interest payments, often used by companies in financial distress.

Registered Form

Registrar of company records ownership of each bond; payment is made directly to the owner of record.