A High Stockturn Rate

question 264

Multiple Choice

A high stockturn rate:

• A) is only possible with a low markup percent.
• B) is likely to result in low profits.
• C) reduces the inventory investment and can improve profits.
• D) increases the space needed for inventory.
• E) None of these alternatives is correct.

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Definitions:

Vertical Integration

A strategy where a company expands its business operations into different steps on the same production path, such as when a manufacturer owns its supplier and/or distributor.

Acquiring Suppliers

The process of taking over or purchasing suppliers to control the supply chain, reduce costs, or secure resources.

Distributors

Entities involved in the supply chain that purchase products from manufacturers and sell them to retailers or directly to consumers.

Diversification

A strategy of investing in a variety of assets to reduce exposure to any single asset or risk.