Please help with the following question: list the three reasons for inventory that you believe will be the most affected by these changes. For each of your three selections, briefly explain the main reason for the effect and why you believe it will result in increased inventories.

In general, the warehousing of inventories is necessary for one or more of the following reasons: 1. To achieve transportation economies of scale (larger quantities are cheaper to ship on a per unit basis when volumes are larger). 2. To achieve production economies of scale (inventory is needed as inputs into production). 3. To take advantage of quantity purchase discounts and forward buys (purchasing larger quantities provides cost savings). 4. To maintain a source of supply (purchasing consistently from the same suppliers or vendors builds loyalty).