How Can a Reduction of In-Transit Inventory Be Encouraged

question 120

Multiple Choice

How can a reduction of in-transit inventory be encouraged?

• A) supplier location near plants
• B) high setup costs
• C) low carrying costs
• D) use of trains, not trucks
• E) low-cost, global suppliers

---

Definitions:

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Stockholders' Equity

The interest left in a firm's assets after liabilities are deducted, reflecting the stake of the company's owners.

Capital Expenditures

Capital employed by a business for the purchase or improvement of tangible assets like land, factories, or machinery.

Double-Declining-Balance

A method of accelerated depreciation in which an asset's book value is reduced by twice the rate of straight-line depreciation.