Question

Explain the tradeoffs involved in setting an ideal level of inventory for a particular product. What are the costs if too much is maintained? What are the costs if too little is maintained?

Answer 1

An ideal inventory is difficult to have.

Step-by-step explanation:

• Inventory is the number of goods and services stored and is accompanied asset and thus management of that asset is a very important aspect of the business.

• If too much inventory is maintained the inventory can lead to liability. If too little inventory is maintained then it leads to shortages of raw material and work in progress.