Improperly managed and uncontrolled stockpiling may greatly increase inventory carrying costs and place a heavy drain on the funds of a small business.

Question

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Improperly managed and uncontrolled stockpiling can lead to increased inventory carrying costs and strain on the funds of a small business. This is because excess inventory ties up capital, requires additional storage space and maintenance costs, and can result in losses due to spoilage, obsolescence, or theft. It is important for businesses to implement effective inventory management strategies to optimize stock levels and ensure profitability.

Improperly Managed and Uncontrolled Stockpiling May Greatly Increase Inventory Carrying