Anne Miles owns a small business that produces gourmet candies that are popular with local households during the holiday party season-from Halloween through New Years. Although it is only mid-September, Anne's storage pantries are beginning to fill with boxes of her special candies. Given the nature of her business, which of the following is the most likely explanation for Anne's large inventory of sweets?
A) She builds up inventory during slower periods so that she'll have plenty of candy to sell during the peak season without having to invest in additional production capacity.
B) She believes that there could might be an unexpected surge in demand for her candy and she doesn't want to lose sales by having too little available for sale.
C) She made a poor sales forecast.
D) She spent a lot of money on her storage facilities and wants to make sure they are fully utilized.

Question

Quizplus · Accepted Answer

Given that Anne's business experiences a peak season during the holiday periods, it is likely that she builds up inventory during slower periods so that she can meet the demand during the peak period without investing in additional production capacity. This also helps her avoid stockouts and ensures that she can maximize her profits during the peak season.

Anne Miles Owns a Small Business That Produces Gourmet Candies