Question

Consider the following statements :
A low inventory turnover may be the result of
1. Obsolescence of some of the stock
2. Slow moving inventory
3. Frequent stock-outs
4. Fast-moving inventory
Which of the above statement(s) is/are correct?

• A. 1 and 2
• B. 4 alone
• C. 2 alone
• D. 2 and 3

Answer 1

The correct option is A 1 and 2

Low inventory turnover implies a situation where the company is holding too much of inventory compared to sales. A low inventory turnover may be the result of
1. Obsolescence of some of the stock
2. Slow moving inventory