Which of the following statements is false?
A) Firms may hold inventory because factors such as seasonality in demand mean that customer purchases do not perfectly match the most efficient production cycle.
B) Inventory helps minimize the risk that the firm will not be able to obtain an input it needs for production.
C) If a firm holds too much inventory, stock-outs, the situation when a firm runs out of product, may occur, leading to lost sales.
D) Because excessive inventory uses cash, efficient management of inventory increases firm value.

Question

Quizplus · Accepted Answer

C) If a firm holds too little inventory, stock-outs, the situation when a firm runs out of product, may occur, leading to lost sales.

Which of the Following Statements Is False