Which of the Following Is a Function of Inventory

question 77

Multiple Choice

Which of the following is a function of inventory?

• A) to decouple various parts of the production process
• B) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand
• C) to take advantage of quantity discounts
• D) to hedge against inflation
• E) All of these are functions of inventory.

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Definitions:

Perpetual System

An inventory management system that records sales and purchases of goods instantly through computerized systems to maintain accurate inventory levels at all times.

Revenue Side

Refers to the income-generating aspects of a business, focusing on activities that bring revenue into the company.

Sales Discounts

Reductions in the selling price offered to customers as incentives to encourage prompt payment.

Cash Discount

A reduction in the invoice price offered by sellers to buyers as an incentive for early payment within a specified period.