A Firm That Is Efficient in Inventory Management Will Have

question 42

Multiple Choice

A firm that is efficient in inventory management will have

• A) a high inventory turnover ratio and a low days sales in inventory ratio.
• B) a low inventory turnover ratio and a low days sales in inventory ratio.
• C) a high inventory turnover ratio and a high days sales in inventory ratio.
• D) a low inventory turnover ratio and a high days sales in inventory ratio.

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Definitions:

Excess Demand

A market condition in which the quantity demanded of a product exceeds the quantity supplied at a given price.

Nonprice Ration

Distributing or allocating goods based on criteria other than price, such as need or merit.

Short Run

A period in which at least one input (such as plant size) is fixed, and only the variable inputs can be adjusted.

Price System

An economic mechanism that uses prices arising from supply and demand interactions to communicate information to help guide the allocation of resources.