Which one of the following inventory-related costs is considered a shortage cost?
A) Storage costs
B) Insurance cost
C) Loss of customer goodwill
D) Theft cost
E) Opportunity cost of capital used for inventory purchases

Question

Quizplus · Accepted Answer

Shortage cost is the cost incurred due to the unavailability of the desired inventory that can lead to a loss of customer goodwill or lost sales. Therefore, option C, loss of customer goodwill, is the only option related to shortage cost.

Which One of the Following Inventory-Related Costs Is Considered a Shortage