Question

Which of the following is true of inventory level?

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

Answer 1

The true statement regarding inventory level is that a financial manager would maintain low inventory levels to minimize costs and avoid unnecessary investment in excess resources.

Step-by-step explanation:

The question is about which statement is true regarding inventory levels in different managerial perspectives. When considering inventory level:

• A manufacturing manager might keep raw materials inventory low to incorporate the most current materials into the production process, although this is not mentioned in the choices, it aligns with modern manufacturing strategies.
• A marketing manager could desire larger inventories to meet customer demands promptly, potentially conflicting with having smaller inventories as per B.
• A purchasing manager might buy more inventory when prices are low to reduce costs, which is somewhat reflected in C, yet this does not disregard inventory requirement considerations.
• A financial manager tends to keep inventory levels low to minimize costs and prevent excessive investment in inventory, which aligns well with D.

Considering the descriptions provided, the most accurate statement regarding maintaining inventory levels is generally D: A financial manager would keep inventory levels low to ensure that the firm's money is not unwisely invested in excess resources.