The Length of Time Between the Acquisition of Inventory and Its

question 28

Multiple Choice

The length of time between the acquisition of inventory and its sale is called the:

• A)operating cycle.
• B)inventory period.
• C)accounts receivable period.
• D)accounts payable period.
• E)cash cycle.

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Definitions:

Optimal Quantity

The most favorable amount of goods or services, determined through analysis, to meet specific objectives like minimizing costs or maximizing profit.

Surplus Inventory

Inventory exceeding the current demand, leading to excess stock that may require special handling or discounting.

Salvaged

Items or materials recovered for use or sale after being damaged, rejected, or abandoned.

Quantity Flexibility Contract

An agreement between a buyer and a supplier that allows the buyer to adjust order quantities based on actual demand within certain limits.