Because Inventory Is Carried at Each Stage in the Supply

question 67

True/False

Because inventory is carried at each stage in the supply chain, and because inventory ties up money, it has been argued that the ultimate goal of effective supply chain management systems is to reduce inventory.

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Definitions:

Cost Of Goods Sold

The total expense directly related to the production or acquisition of the goods sold by a company.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with quickly convertible assets.

Financial Statements

Records that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Accounts Receivable Turnover

A ratio that measures how many times a business collects its average accounts receivable balance in a period.