When Maintaining Appropriate Inventory Level, a Purchasing Manager Should ________

question 174

Multiple Choice

When maintaining appropriate inventory level, a purchasing manager should ________.

• A) keep the inventory level low, to ensure that the firm's money is not being unwisely invested in excess resources
• B) ensure that all orders could be filled quickly, eliminating the need for back orders due to stockouts
• C) implement the production plan to acquire the desired amount of finished goods available on time at a low cost
• D) maintain adequate amount of inventory on hand at desired times and at a favorable price

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Minimum Required Rate

The lowest rate of return or discount rate that investors are willing to accept before investing in a project or financial asset.

Investment Opportunity

Any vehicle or asset that individuals or businesses can put money into in hopes of generating a financial return.

Return On Investment

A financial ratio used to evaluate the effectiveness of an investment, comparing the gain from the investment to its cost.