Which of the following is usually NOT a reason to hold inventory?
A)to drive up price
B)to smooth out fluctuations in production
C)to hedge against variations in demand and supply
D)to decouple one step in the production process from another

Question

Quizplus · Accepted Answer

Holding inventory is not usually done to drive up prices, as this goes against the goal of maximizing profits. Inventory is typically held for practical reasons, such as smoothing out production fluctuations or hedging against variations in demand and supply. Decoupling one step in the production process from another is another practical reason for holding inventory.

Which of the Following Is Usually NOT a Reason to Hold