Question 1: Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the average inventory?
- 310 units
- 300 units
- 150 units
- 155 units
- None of the above
Question 2: The operating cycle begins when _____ and ends when_____.
- inventory is purchased; inventory is sold
- inventory is purchased; payment is received for the sale of that inventory
- inventory is purchased; the supplier of the inventory is paid
- the sale of inventory occurs; payment is received for the sale of that inventory
- the sale of inventory occurs; the supplier of the inventory is paid
Question 3: List three ways in which the firm can expedite payments and accounts receivables.