Discuss Three Reasons Why Producers Might Hold Inventories That Exceed

question 71

Essay

Discuss three reasons why producers might hold inventories that exceed the amount needed to satisfy current demand. Discuss three drawbacks to holding large inventories? Explain.

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Definitions:

Focus Theory

An approach in psychology that examines how individuals concentrate their attention or energy on specific thoughts, tasks, or goals and the impact of this focus on behavior and cognition.

Social Contagion

The spread of ideas, attitudes, or behaviors through a group or society via social influence, similar to the transmission of infectious diseases.

Informational Influence

The effect on an individual's behavior or opinions due to the desire to be correct, often resulting from the acceptance of information from others as evidence about reality.

Injunctive Norms

Societal rules and guidelines that dictate what behaviors are perceived as approved or disapproved by a social group.