Which of the following is true about inventory management for the small business owner?
A)Most small business owners have turned to technology and computer spreadsheets to achieve maximum efficiency in managing it.
B)Inventory is the largest capital investment for most businesses, but few owners use any formal means for managing it.
C)Inventory is generally highly liquid and can be easily mortgaged to a bank for immediate cash, if needed.
D)Inventory yields a return of about 25 percent for manufacturing firms but nothing for service companies.

Question

Quizplus · Accepted Answer

Inventory is one of the largest capital investments for most businesses, and it is important for small business owners to effectively manage their inventory to prevent overstocking or stockouts. However, research suggests that few small business owners use any formal means for managing inventory. While some may use technology and computer spreadsheets, this is not generally the norm. Inventory is not generally highly liquid and cannot be easily mortgaged to a bank for immediate cash, as it is a physical asset that must be sold. The return on inventory varies depending on the industry and business model, so it is incorrect to make a generalized statement about inventory yields.

Which of the Following Is True About Inventory Management for the Small