Answer:
True
Step-by-step explanation:
An inventory cost can be defined as all costs such as carrying cost, stock out (shortage) cost and ordering cost that are associated with the procurement, holding (storage) and management (handling) of inventory.
Raw materials inventory comprises of the overall cost of all resources such as component parts that a business has in stock which haven't been used for production of finished goods or work in process.
Excessive inventory arises when stocks or products are kept for a very long period of time, haven failed in selling them to consumers in a timely manner. Thus, any unsold product that has exceeded the projected consumer demand is generally referred to as an excessive inventory.
Hence, excessive inventory ties up your money so that you cannot use it elsewhere in your business. This is usually as a result of stock obsolescence.