The work in process motive for holding inventories suggests that:
A) firms hold inventories in order to produce more output.
B) when sales are low, firms produce more than they sell and put the extra goods in inventories.
C) firms hold inventories to avoid losing sales.
D) when a product is only partly completed, its components are counted as part of the firm's inventory.

Question

Quizplus · Accepted Answer

The work in process motive for holding inventories refers to the need for companies to maintain parts of their products in various stages of completion within their inventory system. This ensures that production processes can continue smoothly without delays, accounting for items that are not yet fully manufactured but are in the process of being completed.

The Work in Process Motive for Holding Inventories Suggests That