Aaron Attends a Seminar on Just-In-Time Inventory Management

question 245

Multiple Choice

Aaron attends a seminar on just-in-time inventory management. Excited about the idea, he returns to his office at Atlanta Auto Supply to start designing such an inventory system. Which of the following steps must Aaron take as he institutes this change?

• A) Increase safety stock
• B) Raise the reorder point
• C) Reduce customer service standard
• D) Increase order frequency
• E) Reduce estimates of inventory turnover rate

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Definitions:

Payout Percentage

The proportion of earnings distributed to shareholders in the form of dividends, typically expressed as a percentage of net income.

Note Payable

A formal written agreement to pay a specified amount of money, often including interest, by a certain date.

Payout Percentage

The proportion of earnings paid out to shareholders as dividends, usually expressed as a percentage of the company's total net income.