A company may purchase larger amounts of inventory for all the following reasons except
A)to reduce inventory carrying costs.
B)to take advantage of quantity discounts.
C)as a hedge against future price increases.
D)to obtain lower prices purchasing in volume.

Question

Quizplus · Accepted Answer

Purchasing larger amounts of inventory does not always reduce inventory carrying costs. In fact, carrying larger amounts of inventory can increase carrying costs due to additional storage and insurance expenses.

A Company May Purchase Larger Amounts of Inventory for All