The inventory cost that can include insurance, inventory taxes, and obsolescence is called
A) ordering cost.
B) carrying cost.
C) stockout cost.
D) setup cost.
E) storing cost.

Question

Quizplus · Accepted Answer

Carrying cost includes all the costs associated with holding inventory, which can include insurance, inventory taxes, and obsolescence. Ordering cost is the cost associated with placing and receiving orders, stockout cost is the cost associated with running out of stock, setup cost is the cost associated with preparing equipment or machinery for production, and storing cost is a general term that can refer to any cost associated with storing inventory.

The Inventory Cost That Can Include Insurance, Inventory Taxes, and Obsolescence