Other things remaining the same, if the average aggregate inventory value goes down, then
A) inventory turnover ratio and weeks of supply will both go down.
B) inventory turnover ratio will go down, but the weeks of supply will stay the same.
C) inventory turnover ratio and weeks of supply will both go up.
D) inventory turnover ratio will go up, but weeks of supply will go down.
E) inventory turnover ratio stay the same, but weeks of supply will go down.

Question

Quizplus · Accepted Answer

When the average aggregate inventory value decreases, the inventory turnover ratio increases because the same amount of sales is supported by less inventory. Conversely, weeks of supply decreases because less inventory is available to cover the same demand.

Other Things Remaining the Same, If the Average Aggregate Inventory