Cycle Inventory Exists Because Producing or Purchasing in Large Lots

question 36

Multiple Choice

Cycle inventory exists because producing or purchasing in large lots allows a stage of the supply chain to

• A)exploit economies of scale and raise cost.
• B)exploit economies of scale and lower cost.
• C)exploit customers and lower cost.
• D)exploit customers and raise cost.

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Definitions:

Note Receivable

A written promise that one party will receive a specified sum of money from another party at a future date.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Note Duration

The length of time until a note payable or receivable is due to be paid or received.

Promissory Note

A monetary tool that involves a formal commitment from one entity to give a specific amount of cash to another, either when asked or at an agreed-upon date in the future.