Final answer:
Businesses normally adjust their inventory based on the volume of transactions. A high volume of transactions may result in more frequent inventory adjustments, while a low volume may result in less frequent adjustments.
Step-by-step explanation:
In most markets, businesses adjust their inventory based on the volume of transactions. Normally, when a business experiences a high volume of transactions, it will adjust its inventory more frequently to keep up with demand. On the other hand, when transaction volume is low, businesses may adjust their inventory less frequently.
For example, let's say a clothing store experiences a surge in sales during the holiday season. To meet the increased demand, the store will adjust its inventory by ordering more stock. Once the holiday season is over and sales return to normal levels, the store may adjust its inventory again, this time by reducing the amount of stock.
Overall, the frequency of inventory adjustments is determined by the volume of transactions a business experiences.