Especially for wholesalers and retailers involved in the distribution channels for consumer packaged goods, inventory management is a careful balancing act between:

Question

Quizplus · Accepted Answer

Wholesalers and retailers need to maintain lower inventory levels to reduce holding costs and prevent inventory obsolescence, while also ensuring acceptable customer service levels by keeping enough stock to meet demand. This requires a careful balancing act between the two factors. Option A refers to two complementary factors rather than trade-offs, so it is not the best answer. Option B implies that wholesalers and retailers can control supply, which is not always the case in a volatile market, hence it is not a practical choice. Option D represents inconsistency in inventory levels and customer service levels, which is not desirable.

Especially for Wholesalers and Retailers Involved in the Distribution Channels