If the Buyer Fails to Pay According to the Terms

question 23

Multiple Choice

If the buyer fails to pay according to the terms of the agreement, which of the following remedies is available to the seller without court action?

• A) Sellers may cancel the contract as their only remedy.
• B) sellers may cancel the contract and withhold delivery of goods; but sellers may not sell undelivered goods to another buyer or sue for damages.
• C) Sellers may cancel the contract; but sellers may not withhold delivery of goods or sell undelivered goods to another buyer.
• D) Sellers withhold delivery of goods or sell undelivered goods to another buyer but cannot cancel the contract.
• E) Sellers may cancel the contract, withhold delivery of goods, or sell the goods to another buyer.

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Definitions:

Inventory-Related Cost

Expenses associated with ordering, storing, handling, and managing inventory, including costs related to warehousing, spoilage, and obsolescence.

Fixed-Quantity System

An ordering system with the same order amount each time.

Fixed-Period System

A system in which inventory orders are made at regular time intervals.

Economic Batches

The optimal production quantity that minimizes the total cost, including setup costs and holding costs, ensuring cost-efficient production runs.