Identity four reasons why a merchandise inventory that is larger than needed may decrease the net income
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Identity four reasons why a merchandise inventory that is larger than needed may decrease the net income of a business?
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Here are four reasons why a merchandise inventory that is larger than needed can decrease a businesss net income Carrying Costs Holding onto extra inventory requires storage space which translates to rent utilities and insurance expenses Additionally there may be costs associated with security temperature control for perishable items and inventory management software These carrying costs eat into the profit margin of each item Risk of Obsolescence Trends and consumer preferences can change quickly If a business ...View the full answer
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