ISCOM 305 Week 2 - DQ - 7736

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Request Description

Describe inventory and provide some examples.

How does inventory affect a firm’s financial performance?

What are the different types of inventories maintained by a typical business entity?

Solution Description

Inventory is a company’s form of insurance against supply chain uncertainty. “Companies cope with this uncertainty and try to avoid delays with their own form of “insurance,” inventory” (Russell & Taylor, 2009, p. 411). In order to meet customer and self needs, companies maintain inventory.

“Inventory is a stock of items kept by an organization to meet internal or external customer demand” (Russel