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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Short-Term Decision Making
When the question says material in stock suffered a shrinkage, do they mean the quantity of the material or the price? I mean the quantity would also imply the shrinkage of price obviously, but if it is just price that would mean the quantity remains the same as when it was bought. So which one is it?
Shrinkage in this context refers to the quantity of the material. It means that there is less material in stock now compared to when it was originally bought. The price of the material is not affected by the shrinkage.
The quantity of the material may have decreased due to factors such as spoilage, evaporation, or expiration over time.