Question

One use of inventory is A. to provide a hedge against inflation. B. to tightly synchronize production and distribution processes. C. to ensure that item cost is maximized. D. to tightly synchronize a​ firm's production with its​ customers' demand.

Answer 1

Answer:

A, to provide a hedge against inflation

Explanation:

An inventory is the goods or materials or items held by a company for sale at a future period. An inventory could also be called stock.

Inventory has its uses among which is to provide a hedge for inflation. Inventory helps to provide an hedge against inflation as it can be used to keep good or material or ites for sale at a later date in the situation of price rise.

Simply put, Inventory helps to hold out goods, items, materials till a period when it can be resold at a higher price.

Note that, the goods to be kept for future resale is always bought a a lower price today.

Cheers.