Discounts and Allowances Are Effective Incentives Used to Maintain or Increase

question 48

True/False

Discounts and allowances are effective incentives used to maintain or increase inventory levels in the distribution channel.

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Definitions:

Inventory Stock-outs

Occurrences when items are not available in inventory, leading to missed sales or delays.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Shortage Costs

Expenses incurred when demand exceeds supply, including lost sales and the cost of expedited orders or production to meet demand.