Asked by Tanya Woods on Jul 13, 2024
Verified
It can be expected that companies selling perishable goods have a higher inventory turnover than companies selling nonperishable goods.
Inventory Turnover
An indicator that reveals the rate at which a business's inventory is sold and restocked throughout a given period, demonstrating the proficiency of inventory control.
Perishable Goods
Items that have a limited shelf life and require timely sale or consumption before they deteriorate, such as food products and flowers.
- Understand the importance and calculation of inventory turnover and its impact on business operations.
Verified Answer
ST
Stephanie TorresJul 15, 2024
Final Answer :
True
Explanation :
Perishable goods have a shorter shelf life and limited expiration date, which means they need to be sold quickly before they become unsellable. This results in a higher inventory turnover rate for companies selling perishable goods. Nonperishable goods have a longer shelf life, and typically fewer sales, resulting in a lower inventory turnover rate.
Learning Objectives
- Understand the importance and calculation of inventory turnover and its impact on business operations.
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