Which of the following is true about inventory arriving before sales?

Having inventory arrive before sales is advantageous because it minimizes stock outs. Stock outs occur when a product is unavailable for customers to purchase, which can lead to lost sales and disappointed customers. By ensuring that inventory is on hand prior to anticipated sales, a business is better positioned to meet customer demand promptly, improving customer satisfaction and potentially enhancing overall sales performance.

The first option correctly emphasizes the importance of having sufficient stock available to prevent lost sales opportunities. This proactive approach allows businesses to cater to customer needs efficiently, which is critical for maintaining a competitive edge.

The other choices present valid considerations but do not reflect the primary benefit of having inventory available prior to sales. Carrying costs can increase with excess inventory, and while slow sales might suggest a reduced need for preemptive stock, that doesn’t negate the overall benefit of being prepared. Additionally, managing cash flow is a crucial aspect of operations, but having sufficient inventory doesn’t necessarily limit cash flow when managed properly; rather, it can enhance revenue through consistent sales.