The Lumber Yard has installed a new inventory control system which will improve the efficiency of the operations and reduce excess inventory. This system will _____ the inventory period and _____ the cash cycle.
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase
E) decrease; not effect

Question

Quizplus · Accepted Answer

The new inventory control system will decrease the inventory period by improving efficiency and reducing excess inventory, which in turn will decrease the cash cycle by allowing the company to convert inventory into cash more quickly.

The Lumber Yard Has Installed a New Inventory Control System