Which of the Following Would Cause the Greatest Increase in a Company's

question 68

Multiple Choice

Which of the following would cause the greatest increase in a company's inventory turnover ratio?

• A)Keeping the same amount of inventory on hand while unit sales are increasing.
• B)Increasing the amount of inventory on hand while unit sales are increasing.
• C)Keeping the same amount of inventory on hand while unit sales are decreasing.
• D)Decreasing the amount of inventory on hand while unit sales are increasing.

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Definitions:

Minimizes Profit

A situation or strategy that unintentionally reduces the potential earnings or efficiency of a business operation.

Aggregate Planning

A process by which a company determines optimal levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

Capacity

The maximum number of goods a company can produce or the amount of work it can perform in a given time period, under current conditions.

Production

The process of creating goods and services through the combination of labor, materials, and machinery.