Which of the following would not generally be a motive for a firm to hold inventories?
A) to decouple or separate parts of the production process
B) to provide a stock of goods that will provide a selection for customers
C) to take advantage of quantity discounts
D) to minimize holding costs
E) All of the above are functions of inventory.

Question

Quizplus · Accepted Answer

Minimizing holding costs is a motive for holding inventories. Therefore, option D is incorrect. Options A, B, and C are valid motives for holding inventories. Thus, option E is also incorrect as it states that all the options are valid motives.

Which of the Following Would Not Generally Be a Motive