Which of the Following Would Cause Average Inventory Holdings to Decrease

question 9

Multiple Choice

Which of the following would cause average inventory holdings to decrease, other things held constant?

• A) the purchase price of inventory items decreases by 50 percent.
• B) the carrying price of an item decreases (as a percent of purchase price).
• C) the sales forecast is revised downward by 10 percent.
• D) interest rates fall.
• E) fixed order costs double.

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Definitions:

Somatic

Relating to or affecting the body, especially as distinguished from the mind or consciousness.

Parasympathetic

Pertaining to the part of the autonomic nervous system that conserves physical resources and slows down heart rate.

Axon

The part of the neuron that carries information away from the cell body toward other cells.

Neuron

A distinct type of cell responsible for conveying nerve signals; commonly known as a neuron.