Inventory Turnover in the Spaces Provided,indicate the Likely Effect of Each of Each

question 22

Essay

Inventory turnover
In the spaces provided,indicate the likely effect of each of the following events or strategies upon the inventory turnover rate.Use the following code letters: I for Increase,D for Decrease,and NE for No Effect.
______ (a)Switched from the LIFO flow assumption to FIFO during a period of rising prices.
______ (b)Dramatically increased advertising expense.
______ (c)Increased the sales price of merchandise that is so popular it is difficult to keep in stock.
______ (d)Implemented internal control procedures to reduce a serious inventory shrinkage problem.
______ (e)Switched from a restrictive credit policy to offering liberal terms to credit customers.

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Definitions:

Linear Demand Curve

A demand curve that shows a straight-line relationship between price and quantity demanded, suggesting a constant rate of change.

Constant Elasticity

refers to a condition in economics where the elasticity of a function, such as demand or supply, remains constant along the curve, indicating a proportional and consistent reaction to changes in other variables.

Relatively Elastic

Describes a situation where a product or service's demand or supply is significantly responsive to changes in price, indicating a greater percentage change in quantity demanded or supplied than the percentage change in price.

Total Revenue

The income generated from the sale of goods or services before any costs are subtracted.