What characterizes "flow inventory"?

Flow inventory is characterized by its frequent movement in and out of storage. This type of inventory is actively managed within the supply chain to ensure that goods are available when needed, leading to a reduction in holding costs and increasing efficiency. The nature of flow inventory is such that it is continuously replenished based on demand, making it essential for maintaining optimal stock levels in environments with high turnover rates.

The other options do not effectively capture the essence of flow inventory. While it is true that flow inventory might include items that are seldom moved or stored for long periods, this does not encompass the frequent activity associated with flow inventory. It does not have to be limited to perishable goods, as flow inventory can include a variety of items that are sold or used rapidly. Additionally, obsolete inventory is the opposite of flow inventory; it represents products that are no longer sellable or relevant, whereas flow inventory is active and in demand. Thus, the correct characterization of flow inventory is indeed its frequent movement in and out of storage.