When a Firm Uses a Direct-Shipment Design,______

question 32

Multiple Choice

When a firm uses a direct-shipment design,______.

• A)each supplier sends shipments directly to each of the buying firm's locations
• B)the only decision the buying company's purchasing manager has to make is the quantity of goods to be ordered
• C)the only decision the buying company's purchasing manager has to make is the date the goods are to be delivered
• D)the only decision the buying company's purchasing manager has to make is the price of goods to be ordered

---

Definitions:

Inventory Costing

The method used to value and account for inventory, including costs of purchase, production, and conversion.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated after considering the cost of goods sold and any new purchases.

Inventory Management

The process of ordering, storing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing such items.

Days' Sales

A measure that indicates how many days, on average, it takes a company to collect revenue after a sale has been made.