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D)It means that inventory is less likely to become obsolete or out of date.

Question

Quizplus · Accepted Answer

A shorter inventory turnover period means that inventory is sold quickly and replenished frequently, reducing the amount of money tied up in inventory and minimizing the risk of obsolescence. It also means that storage space requirements are reduced. However, it does not necessarily mean that management can have the cost advantage of buying in bulk, as buying in bulk often results in lower unit costs but also ties up more funds in inventory, which contradicts the advantage of a shorter inventory turnover period.

Which of These Is Not an Advantage of a Shorter