Question

There isn’t a definitive relationship – more inventory could mean a lower or a higher in-stock probability What is the relationship between the average inventory and the in-stock probability?

a. The more inventory the lower the in-stock probability


b. There isn’t a definitive relationship – more inventory could mean a lower or a higher in-stock probability


c. The more inventory the higher the in-stock probability

Answer 1

The correct answer is letter "C": The more inventory the higher the in-stock probability.

Step-by-step explanation:

If a company inventory increases it implies it has bought more than what it has sold. When inventory increases the company can meet more demand, increasing the likelihood of satisfying all customers. Though, if the demand does not increase, the excess in supply could be reflected as negative in the balance sheet.