A reason to hold inventory arises when an organization anticipates that an unusual event might occur that will negatively impact its source of supply.

Question

Quizplus · Accepted Answer

Holding inventory can be used as a safeguard against potential disruptions in the supply chain caused by unusual events, such as natural disasters or labor strikes. This allows the organization to continue operating and meeting customer demand even when the regular source of supply is disrupted.

A Reason to Hold Inventory Arises When an Organization Anticipates