Question

Which of the following statements is most consistent with efficient inventory management? The firm has a:

a. low incidence of production schedule disruptions.
b. below average total assets turnover ratio.
c. relatively high current ratio. relatively low DSO.
d. below average inventory turnover ratio.

Answer 1

Answer:

The correct answer is letter "A": low incidence of production schedule disruptions.

Explanation:

Efficient inventory management is the approach selected to handle the firm's cash flow efficiently. The approach implies reducing wasting time, diminishing the time the items are stored in the warehouse, and predicting future demand whenever possible. It also involves having little to no disruption in the production schedule.