Which one of the following is NOT a reason for firms to carry inventory?
A) To meet variations in product demand
B) To increase production change/setup costs
C) To allow for production scheduling flexibility
D) To take advantage of quantity discounts
E) To maintain independence of operations

Question

Quizplus · Accepted Answer

Carrying inventory does not increase production change/setup costs, it helps to reduce them by allowing for efficient production scheduling and reducing the number of changeovers required. The other options (A, C, D, and E) are all common reasons for firms to carry inventory.

Which One of the Following Is NOT a Reason for Firms