Question

There is no way to avoid carrying inventory, so the best an owner can do is manage its movement and control its costs.

a. true
b. false

Answer 1

While it is impossible to completely avoid carrying inventory, business owners can effectively manage it to control costs and improve efficiency.

Step-by-step explanation:

The statement in the question is true: there is no way to avoid carrying inventory completely, but business owners can manage its movement and control its costs. Inventory management involves carefully tracking the levels of inventory, ordering new stock when necessary, and ensuring that inventory is sold or used before it becomes obsolete or expires.

By effectively managing inventory, business owners can prevent excess inventory from tying up capital, reduce the risk of stockouts, and minimize the costs associated with holding inventory, such as storage and insurance. They can also optimize the movement of inventory within the supply chain to minimize transportation costs and improve efficiency.

For example, a retailer may use inventory forecasting tools to predict demand and adjust their ordering accordingly. They may also implement just-in-time inventory systems, where inventory is received from suppliers just before it is needed, reducing the need for extensive on-hand inventory.