During the current year, the Jordan family trust, an inter vivos trust, has business income of $220,000. Of this amount, $50,000 is retained in the trust with a joint election….
What are the reasons for holding inventories?
1.How might each of the following affect the level of inventories held by a business?
(a) An increase in the number of production bottlenecks experienced by the business.
(b) A rise in the level of interest rates.
(c) A decision to offer customers a narrower range of products in the future.
(d) A switch of suppliers from an overseas business to a local business.
(e) A deterioration in the quality and reliability of bought-in components.
2.What are the reasons for holding inventories? Are these reasons different from the reasons for