Final answer:
Companies can reduce inventory costs and maintain high levels of customer service through various methods such as expanding or reducing production, setting prices, opening or closing facilities, hiring or laying off workers, and starting or stopping product sales.
Step-by-step explanation:
For some companies, it is possible to reduce inventory costs and maintain high levels of customer service if they can expand or reduce production, set the price they choose, open new factories or sales facilities or close them, hire workers or to lay them off, or start selling new products or stop selling existing ones.
Take, for example, a messenger company that delivers packages around a city. If the price of gasoline falls, the company can deliver messages more cheaply than before, resulting in lower costs and higher profits. This allows the company to increase its supply and serve a greater area.