C&A manufactures 50,000 cars each year. If its annual turns increase from 2 to 5, what happens to its average inventory? O Increases from 100,000 to 250,000 Remains the same Decreases from 25,000 to 10,000 O Cannot be determined
Expert Answer
Answer C : Decrease from 25000 to 10000
If we increase the inventory turns, then the inventory of the organization will decrease. This shows that high number of orders will be required for meeting the demand. Hence upon increasing the annual inventory turns from 2 to 5 means the average invenotry reduction from 25000 to 10000.
Inventory turns increase means
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