Question

How much inventory should a merchandising business keep? Select one: a. enough to meet its customers'...

How much inventory should a merchandising business keep?

Select one:

a. enough to meet its customers' needs.

b. as much as possible to prepare for unexpected demand.

c. as litttle as possible to avoid storage fees

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Homework Answers

Answer #1

Solution:

A)as little as possible to avoid storage fees,

It is a business that buying finished products and resells them to consumers. Merchandisers are dealing with customers, they knows the level of demand for each product made by a particular customer. So they never went for excessive stock. Usually they used to follow little level of stock instead of excessive stocks.The advantage is that, It can reduce storage fees and helps to meet small levels of unexpected demands.

Rest of the options are wrong. Because if we are expecting unexpected demand and making inventory system according to that, It will leads to loss. Customers demand will vary, So it is not a better way to follow enough level of stock to meet its customer demands.

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