The decisions that follow were made by the management of Posad Cotton Company. Indicate whether each decision pertains primarily to

(a) cash flow management,

(b) choice of inventory system,

(c) foreign transactions, or

(d) control of merchandising operations.

1. Decided to mark each item of inventory with a magnetic tag that sets off an alarm if the tag is removed from the store before being deactivated.

2. Decided to reduce the credit terms offered to customers from 30 days to 20 days to speed up collection of accounts.

3. Decided that the benefits of keeping track of each item of inventory as it is bought and sold would exceed the costs of such a system.

4. Decided to purchase goods made by a Chinese supplier.

5. Decided to purchase a new type of cash register that can be operated only by a person who knows a predetermined code.

6. Decided to switch to a new cleaning service that will provide the same service at a lower cost with payment due in 30 days instead of 20 days.

Foreign Merchandising Transactions