The profitability of a firm can be negatively affected by:
A) too much inventory.
B) too little inventory.
C) either A or B.
D) neither A nor B.

Question

Quizplus · Accepted Answer

Both too much inventory and too little inventory can negatively affect a firm's profitability. Too much inventory can lead to increased holding costs, while too little inventory can result in lost sales and dissatisfied customers.

The Profitability of a Firm Can Be Negatively Affected By