Because managing inventory is just like managing any other investment, decisions about the level of inventory should be guided by
A) a cost-benefit analysis.
B) the value of the inventory.
C) the effect of inventory levels on customer relations.
D) the effect of inventory levels on sales.

Question

Quizplus · Accepted Answer

A cost-benefit analysis should guide decisions about the level of inventory as it helps to determine the optimal balance between the costs of holding inventory (storage, obsolescence, etc.) and the benefits of having a sufficient quantity of inventory to fulfill customer demands and maintain operations. While the value of inventory, customer relations, and sales are important considerations, a cost-benefit analysis is a systematic and data-driven approach to decision-making that takes all relevant factors into account.

Because Managing Inventory Is Just Like Managing Any Other Investment