While carrying large inventories may minimize ____ costs, it is likely to maximize ____ costs.
A) processing; shipping
B) stock-out; holding
C) handling; processing
D) stock-out; handling
E) holding; stock-out

Question

Quizplus · Accepted Answer

Carrying large inventories helps avoid stock-outs (when items are not available to meet demand), thus minimizing stock-out costs. However, it increases holding costs, which are the expenses associated with storing unsold goods.

While Carrying Large Inventories May Minimize ____ Costs, It Is