The two major costs associated with inventory are
A)ordering costs and setup costs.
B)setup costs and stockout costs.
C)stockout costs and carrying costs.
D)ordering costs and carrying costs.
E)none of these.

Question

Quizplus · Accepted Answer

The two major costs associated with inventory are ordering costs and carrying costs. Ordering costs are the costs incurred in placing and receiving orders for inventory, while carrying costs refer to the costs associated with holding inventory, such as storage, insurance, and obsolescence. While setup costs and stockout costs are also important costs to consider in inventory management, they are not the two major costs.

The Two Major Costs Associated with Inventory Are