Question by Cindy B: What are three types of inventory costs, and why is it important for a company to reduce its inventory-hold?
I need this for a business class
Thank You for any and all help
Answer by Big Time C-Hawk Fan
Inventory types; Raw materials, Goods in process (stuff being built), and finished goods (inventory-hold). Raw materials and goods in process should eventually end up being finished goods so they are ok. However, it is important to reduce inventory-hold because products not sold that are stocked in the shelves or warehouses are costing money. Goods unsold equal capital that is just lying around.
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