Fielding Corporation has managed to reduce its inventories to half of its prior year total by implementing just-in-time inventory concepts. The significant reduction has led to a higher inventory turnover. Fielding is worried about stock outs and is considering reinvesting in inventory. Fielding should look to industry averages before making a commitment to spend more on restocking their inventory.

Question

Quizplus · Accepted Answer

It is recommended that Fielding looks at industry averages to determine whether their new inventory turnover rate is within acceptable levels and whether additional inventories are necessary. This will help them make an informed decision about reinvesting in inventory.

Fielding Corporation Has Managed to Reduce Its Inventories to Half