What takes place when firms built up their stock of finished products​

Finally organizations hold FG inventories to satisfy customer demand, to reduce sales management and ordering costs, stock out costs and reduce transportation costs and lead times.

In cases where they are able to estimate a increase in industry prices, taxes or other levies which will result in an overall price increase, they tend to buy and hold huge stocks of raw materials at current prices. They also hold up finished stock in warehouses in anticipation of a impending sale price increase.

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