A Low Inventory Turnover Ratio Might Indicate That

question 41

Multiple Choice

A low inventory turnover ratio might indicate that:

• A)the firm is using the last-in first-out (LIFO) method of inventory valuation during inflationary periods.
• B)the cost of inventory of the firm is lower than that of the similar firms.
• C)the firm is holding excess stocks of inventory.
• D)the inventory of the firm is sold and restocked very often.
• E)the firm purchases all its inventory on credit.

Appreciate the benefits of third-party involvement in supply chain surplus through aggregation strategies.

Recognize the importance of evaluating supplier performance on various factors.

Identify the role of intermediaries in simplifying buyer-seller relationships.

Understand the strategic decisions involved in offshoring production facilities.

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Definitions:

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) and used by companies outside of the United States.

LIFO

Last In, First Out, an inventory valuation method where the last items placed in inventory are the first ones sold.

Link-Chain Method

A statistical method used for adjusting economic or financial time series data for the effects of inflation or other external factors to show real changes over time.