The costs that result when a company runs out of a particular item for which there is a customer demand are ________.
A) shrinkage costs
B) shortage costs
C) stockout costs
D) EOQ estimation costs

Question

Quizplus · Accepted Answer

Stockout costs result from lost sales or dissatisfied customers when a company runs out of a particular item for which there is a customer demand. Shrinkage costs refer to losses resulting from employee theft, shoplifting, or administrative errors. Shortage costs and EOQ estimation costs are not commonly used terms in inventory management.

The Costs That Result When a Company Runs Out of a Particular