Firms with highly volatile and perishable inventory should assume relatively low levels of risk.

Question

Quizplus · Accepted Answer

Firms with highly volatile and perishable inventory, such as fresh produce or seasonal items, are at risk of incurring losses if they are unable to sell the inventory before it goes bad or becomes obsolete. Therefore, to mitigate this risk, such firms should assume relatively low levels of risk in their inventory management practices. For example, they may choose to keep inventory levels low to reduce the likelihood of not being able to sell all of their inventory in time.

Firms with Highly Volatile and Perishable Inventory Should Assume Relatively