Firms in turnaround situations find that cutting administrative expenses and inventories and speeding up collection of receivables are ineffective strategies.

Question

Quizplus · Accepted Answer

One of the strategies used by successful companies in need of a turnaround is to try to aggressively cut administrative expenses and inventories and speed up collection of receivables. Costs also can be reduced by outsourcing production of various inputs for which market prices may be cheaper than in-house production costs.

Firms in Turnaround Situations Find That Cutting Administrative Expenses and Inventories