Which of the following is something that carrying inventory allows a company to do?

• A. Guarantee that all inventory will be sold at a profit
• B. Meet customer demand promptly by having products available for sale
• C. Eliminate the need for inventory tracking systems
• D. Avoid all storage and holding costs

Answer: (B)

Verified step by step guidance

1. Understand the concept of carrying inventory: Carrying inventory refers to the practice of maintaining a stock of goods or products that a company can sell to customers. This ensures that the company can meet customer demand promptly.
2. Analyze the options provided in the question: Evaluate each statement to determine its validity in relation to the purpose of carrying inventory.
3. Option 1: 'Guarantee that all inventory will be sold at a profit' - This is incorrect because carrying inventory does not guarantee profitability. Profit depends on factors like pricing, demand, and market conditions.
4. Option 2: 'Meet customer demand promptly by having products available for sale' - This is correct because carrying inventory ensures that products are readily available to meet customer needs without delays.
5. Option 3: 'Eliminate the need for inventory tracking systems' and Option 4: 'Avoid all storage and holding costs' - Both are incorrect because carrying inventory requires tracking systems to manage stock levels and incurs storage and holding costs.