Microsoft MB-330 Microsoft Dynamics 365 for Finance and Operations, Supply Chain Management 05 31Oct2024 - Practice Quiz

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Question 1 of 30

A manufacturing company is evaluating its supply chain efficiency by analyzing its inventory turnover ratio. The company has an annual cost of goods sold (COGS) of $1,200,000 and an average inventory value of $300,000. Additionally, the company is considering implementing a just-in-time (JIT) inventory system to reduce holding costs and improve cash flow. What is the inventory turnover ratio, and how would the implementation of a JIT system potentially impact this ratio?

4 times; it would increase the ratio by reducing average inventory levels

2 times; it would have no effect on the ratio

6 times; it would decrease the ratio due to increased stockouts

3 times; it would complicate the supply chain process

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