Which of these is not an advantage of a shorter inventory turnover period?
A) It means that fewer funds are tied up in inventory so more are available for use in the business.
B) It means that inventory is less likely to become obsolete or out of date.
C) It means that less storage space is needed for inventory.
D) It means that management can have the cost advantage of buying in bulk.

Question

Quizplus · Accepted Answer

A shorter inventory turnover period means that inventory is sold quickly and therefore there is less risk of it becoming obsolete or out of date. It also means that less storage space is needed for inventory, which can reduce costs. Additionally, it means that fewer funds are tied up in inventory, which can allow for more funds to be available for use in the business. However, a shorter turnover period may not allow management to take advantage of cost savings from buying in bulk, as they may need to purchase inventory more frequently.

Which of These Is Not an Advantage of a Shorter