A Company Should Always Keep Extra Inventory on Hand; It

question 42

True/False

A company should always keep extra inventory on hand; it could be needed if demand increases and it has to be bought sooner or later so it adds nothing to cost.
BT: Knowledge

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Definitions:

Merchandising Entities

Companies that purchase goods at wholesale prices and sell them at retail prices, making a profit from the markup.

Cost of Goods

The total expense incurred to produce products sold by a company, including direct materials, direct labor, and manufacturing overheads.

Front Office

The part of a company that deals directly with customers, providing services, support, and interaction with clients and visitors.

Back Office

The administrative and support personnel in a company who are not client-facing, responsible for functions such as IT, human resources, accounting, and compliance.