The Basic Assumption of the ABC Approach to Inventory Management

question 25

Multiple Choice

The basic assumption of the ABC approach to inventory management is that:

• A)inventory should be divided dependent on the type of cash or credit sale anticipated.
• B)most items are ordered,stocked,and sold in a relatively short period of time.
• C)firms should receive A customer's order Before incurring inventory Costs.
• D)a small portion of inventory represents a large portion of inventory costs.
• E)firms should Always Be Consistent in the amount of inventory ordered.

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Definitions:

RUPA

The Revised Uniform Partnership Act, which governs the operation of partnerships in the United States.

Jointly and Severally

A legal term indicating that parties can be held responsible together or individually for a debt or obligation.

Limited Partnership (LP)

A Limited Partnership (LP) is a form of partnership consisting of at least one general partner, who manages the business and is personally liable, and one or more limited partners, who contribute capital and share in profits but have limited liabilities.

Jointly Liable

A legal term indicating that two or more parties are equally responsible for the fulfillment of a liability or debt.