Carrying excessive inventory can help counter demand volatility when new products come on the market.

Question

Quizplus · Accepted Answer

Carrying excessive inventory can actually create additional financial risk and expenses, such as storage costs, spoilage, and obsolescence. The better approach is to adopt more flexible supply chain strategies, such as just-in-time inventory or agile manufacturing, that can help quickly respond to changes in demand.

Carrying Excessive Inventory Can Help Counter Demand Volatility When New