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Which of the following is likely to increase the inventory holding period?
A) Building up inventory levels in preparation of a sales and marketing campaign later in the year
B) Scrapping of old and obsolete items of inventory
C) Only ordering goods from a reliable supplier upon receipt of a customer order
D) Implementation of effective goods requisitioning and ordering policies
Dear tutor, correct answer is A. But i didn’t understand. Could you please explain all choices (A,B,C,D).Thanks in advanceThe holding period is measuring how long the inventory will last based on the current level of sales.
A is correct because although the future sales are going to be higher, the current sales are not changed but the inventory is a lot higher.
B means there will be less inventory, and so the holding period is not going to be higher.
C and D neither of them are going to change the level of inventory.
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