Which of the following statements is the most correct? Increasing inventory turn

Question

Which of the following statements is the most correct?

Increasing inventory turnover is always a sign of a good business strategy.

Decreasing inventory turnover with higher profit margin can be a sign of the firm moving to low-cost leadership strategy.

Decreasing inventory turnover with higher profit margin can be a sign of the firm moving to a differentiation strategy.

Decreasing inventory turnover is always a sign of a failing firm.

Increasing inventory turnover is always a sign of a good business strategy.

Decreasing inventory turnover with higher profit margin can be a sign of the firm moving to low-cost leadership strategy.

Decreasing inventory turnover with higher profit margin can be a sign of the firm moving to a differentiation strategy.

Decreasing inventory turnover is always a sign of a failing firm.

Explanation / Answer

When a company's inventory turnover is decreasing, it means that it is holding its inventory longer than previously measured time periods. Hence decreasing inventory turnover is always a sign of a failing firm.

The folllowing statements is the most correct:

Decreasing inventory turnover is always a sign of a failing firm.

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