Which of the following statements is best?
I. The conflict between marketing, finance and production centers on customer service, disruption to production, and inventory levels.
II. Marketing's objectives can be met with higher inventories.
III. Finance's objectives can be met with higher inventories. IV. Production's objectives can be met with higher inventories.
a. all of the above are true
b. I and II only are true
c. I, II and III only are true
d. I, II and IV only are true
e. II, III and IV only are true

Option D I, II and IV only are true.

Explanation:

Conflict explanation:

The reason is that their is conflict between marketing and finance that greater the marketing, the greater is the cost to the company. Similarly the greater the production of unit is, the greater is the cost to the company. The conflict between marketing and production department is that greater the marketing of the product is, the greater are the number of units of the product must be produced by the production department. So the statement 1 is correct.

What we derived from conflict explanation?

Marketing objectives can be met by the production meets the demand of the customers. This means the higher is the marketing expense the greater is the stress on production department to produce more to meet demand. This means Statement 2 is also correct.

Statement 3 is incorrect because the higher the inventory levels are, the higher are the cost to company to hold these inventories. So here we have a conflict of finance and production department.

Statement 4 is correct because the primary objective of the production department is producing more to meet the maximum number of customers need and grasp economies of scale.