Maintaining an inventory helps a business to have an optimal level of cash flow by:

Question

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Maintaining an inventory can help reduce the cost of processing orders as it allows a business to have the necessary goods readily available. This can lead to faster order fulfillment and reduced administrative costs. While carrying inventory can increase the cost of storage, it also helps ensure that the business does not run out of stock, which could result in lost sales and reduced cash inflow. And while waste can be a concern for some businesses, maintaining an optimal level of inventory can help minimize waste and reduce cash outflow. Overall, the benefits of maintaining an inventory can outweigh the costs, leading to better cash flow management.

Maintaining an Inventory Helps a Business to Have an Optimal