A manufacturing company which produces in anticipation of future orders and sells its products directly to consumers experiences an unexpected large reduction in consumer demand. This is most likely to increase which type of inventory?
A manufacturing company which produces in anticipation of future orders and sells its products directly to consumers experiences an unexpected large reduction in consumer demand. This is most likely to increase which type of inventory?
When a manufacturing company produces in anticipation of future orders and experiences an unexpected large reduction in consumer demand, it is most likely to have an increase in finished goods inventory. This is because the products have already been manufactured and are awaiting sale, but the decrease in demand means they are not being purchased as expected.
Producing in anticipation of future orders typically leads to the accumulation of finished goods inventory