Question

Minimum inventory is to ensure :
O A minimum working capital
O B Safety of production process
O
C maximum profitability
O D Minimum profitability​

Answer 1

Given : Minimum inventory

To Find : Minimum inventory is to ensure  

O A minimum working capital

O B Safety of production process

O  C maximum profitability

O D Minimum profitability​

Solution:

Minimum inventory is to ensure  minimum working capital

option A is correct.

There is always a holding cost associated with inventory

Cost is because of capital invested in inventory

and then space required to keep the inventory

To Reduce working capital , its better to keep minimum inventory

Working capital is basically capital required continuously for raw material and making operations working.

Hence Minimum inventory is to ensure minimum working capital

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