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Question
Which of the following would cause average inventory holdings to decrease, other things held constant?a. The purchase price of inventory items decreases by 50 percent.
b. The carrying price of an item decreases (as a percent of purchase price).
c. The sales forecast is revised downward by 10 percent.
d. Interest rates fall.
e. Fixed order costs double.
Answer
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Which of the following is not correct for a firm with seasonal sales and customers who all pay promptly at the end of 30 days?
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e. DSO will vary from month to month.
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a. True
b. False