1. If your company experiences a doubling of its inventory turns without a change occurring of cost of goods sold (COGS), a possible reason might be:

aProcess improvement reduced average inventory cost to one quarter

bProcess improvement reduced average inventory cost in half

cOperational problems doubled the cost of average inventory

dLead time of deliveries were cut in half

2.As a firm spends more on inventory, cost of lost sales will:

aIncrease

bDecrease

cStay the same

dCannot be determined