Holding more inventory generally raises which of the following?

Holding more inventory generally raises costs due to various factors associated with inventory management. When a company increases its inventory levels, it incurs several types of expenses, including storage costs, insurance, depreciation, and potential obsolescence. Additionally, there are opportunity costs tied to the capital invested in inventory that could have been utilized elsewhere in the business.

While having more inventory can improve service levels by ensuring that products are available when customers want them, the primary effect of increased inventory is a rise in costs. It's essential for businesses to balance the need for sufficient inventory to meet customer demands with the costs associated with holding that inventory. This balance is crucial in supply chain and operations management, as excessive inventory can lead to increased costs that can impact overall profitability.