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.