Question

"The key to current asset planning is the ability of management to forecast sales accurately and then match production schedules with the sales forecast.

A True
B False"

Answer 1

Accurate sales forecasting is key to current asset planning, enabling management to match production with anticipated demand and manage inventory and cash flow effectively, especially given the long-term nature of production expansion.

Step-by-step explanation:

The statement that the key to current asset planning is the ability of management to forecast sales accurately and then match production schedules with the sales forecast is True. Accurate sales forecasting is crucial because it enables management to make informed decisions about the volume of production required to meet consumer demand without overproducing or underproducing. Efficient current asset management relies on balancing inventory levels, ensuring adequate cash flow, and maintaining the flexibility to adjust as market conditions change. Understanding supply side dynamics, where it's easier to expand production in the long term than the short term, further highlights the importance of accurate forecasting and production planning.