Which of the following statements is true about inventory?

Which of the following statements is true about inventory?


If a firm attempts to produce its goods just in time to meet sales demand, the level of inventory will be relatively high.

If the firm produces materials in a constant, level pattern, inventory will decrease when the sales decrease.

Inventory shortages are never a problem to potential profits compared to too much inventory.

The inventory that a firm holds is controlled by both production needs and marketing considerations.

The objective of firms is to maximize the investment in inventory even if it leads to production cutbacks


Answer: The inventory that a firm holds is controlled by both production needs and marketing considerations.


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