Which of the following is true of inventory level?
A) A purchasing manager would purchase higher inventories when prices are low and lower inventories when prices are high irrespective of inventory requirement.
B) A marketing manager would like to have smaller inventories of finished products to ensure production of goods as per customer specification.
C) A financial manager would keep inventory levels low to ensure that the firm's money is not unwisely invested in excess resources.
D) A manufacturing manager would keep raw materials inventories low to ensure use of latest materials in production process.

Question

Quizplus · Accepted Answer

A financial manager is responsible for managing the funds of the company and ensuring that they are optimally utilized. Keeping inventory levels low helps in preventing excess investment of money in resources that are not required immediately. It also helps in minimizing storage and handling costs associated with holding inventory. Therefore, option C is the most appropriate choice. Option A is incorrect because purchasing decisions should be based on inventory requirements and not just price fluctuations. Option B is incorrect because finished product inventories are necessary to meet customer demand and production schedules. Option D is incorrect because maintaining low raw material inventories may lead to production delays if required materials are not available on time.

Which of the Following Is True of Inventory Level