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 as inventory is converted to cash more quickly.

The Lumber Yard Has Installed a New Inventory Control System