Why do some firms keeps stocks close to the market while others keep stocks in the component form at their plants? How do these decisions affect their performance?
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Answer:
public bodies balance budgets
Why do some firms keeps stocks close to the market while others keep stocks in the component form at their plants? How do these decisions affect their performance?
Some firms keep their stock near the market so that they can take immediate advantage of short-term changes in the market.
In addition to long-term changes in the market, short-term changes also take place. Such firms keep a constant watch on the market situation and unload their goods in the market according to any change in the price of the product in the market.
Such firms keep the stock near the market so that in the event of a short-term change in the market, the stock can be delivered to the market immediately to get maximum profit in the short-term change.
Some other firm holds stock in their plants as a component as they work under a long-term plan. Such firms carry out their business keeping the focus on the stability of the market. They are not affected by short-term market changes.
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