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Explain the risks and benefits associated with holdinginventoryExplain the risks and benefits associated with...

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Accounting

Explain the risks and benefits associated with holdinginventory

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Risk associated with holding inventory Followings are the main risk associated with holding inventory 1 Blockage of cash As we know that purcahse of inventory requires cash so holding more and more inventory means blockage of more and more cash In other words we can say that holding more inventory will lead to blockage of cash funds unnecessarily 2 Risk of obsolescence Market is dynamic in nature and demands of the customers changes time to time So if a firm holds excess inventory at any time then    See Answer
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In: AccountingExplain the risks and benefits associated with holdinginventoryExplain the risks and benefits associated with holdinginventory

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