Which of the following is a disadvantage of excessive inventory?
A)it creates an unnecessary waste of scarce resources.
B)It leads to higher inventory ordering cost.
C)It leads to lower average inventory.
D)It eliminates cycle stock.
E)It reduces the need to conduct cycle count.

Question

Quizplus · Accepted Answer

Excessive inventory leads to unnecessary waste of scarce resources such as storage space, labor, and materials. It also ties up valuable capital that could be used for other purposes, such as investment in research and development or expansion of the business. In addition, excessive inventory can lead to increased costs due to obsolescence, spoilage, and theft.

Which of the Following Is a Disadvantage of Excessive Inventory