Norske Skog is a global supplier of publication paper with mills and sales offices on five continents. The Norwegian company's core business is newsprint and magazine paper for its 2,300 customers worldwide. It has a partnership with many of its customers and develops special paper grades in co-operation with its customers. Sarah DeJohn, its chief executive, announced the company would be downsizing in 2003 due to falling demand for paper. (Demand for publication paper is affected by economic activity in the market and printed media advertising revenue.)
-As magazine and newspaper publishers earn less advertising revenue, they are working down their inventory stock of paper because it seems the economy is in a downturn. When the economy turns around, these same companies will more than likely stockpile publication paper. This activity is explained by the:

Question

Quizplus · Accepted Answer

The acceleration principle explains how investment levels can fluctuate significantly in response to changes in consumer demand. In this case, the demand for publication paper decreases as economic activity slows down, leading companies to reduce their inventory. When the economy improves, they are likely to increase their stockpile, reflecting the acceleration principle's impact on investment and inventory levels in response to economic cycles.

Norske Skog Is a Global Supplier of Publication Paper with Mills