If a firm decreases the level of inventory it carries,the order costs will ________ and the carrying costs will ________.
A)decrease,decrease
B)increase,increase
C)decrease,increase
D)increase,decrease
E)remain unchanged,decrease

Question

Quizplus · Accepted Answer

Decreasing inventory levels typically leads to an increase in the number of orders placed, which raises order costs. However, carrying costs decrease because there is less inventory to store, insure, and finance.

If a Firm Decreases the Level of Inventory It Carries,the