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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