Question $3$

$2\mathrm{.}6pts$

The following is TRUE about Inventory:

Firms increase inventory because more inventory means more movement of materials

Firms increase inventory because more inventory sitting for longer periods of time present more opportunities for damage, errors, rework, theft, and obsolescence

Firms increase inventory because there is an opportunity cost to holding inventory

Firms increase inventory because there is a risk of interruptions in the flow of components$/$materials from upstream suppliers

Firms increase inventory because the more we spend on inventory, the mqve we need to spend on other inventory$-$related expenditures