Which of these is not considered a cost of holding inventory?
A)Opportunity cost of having funds tied up in inventory.
B)Risk of bad debts.
C)Cost of storage and handling.
D)Risk of obsolescence.

Question

Quizplus · Accepted Answer

Risk of bad debts is not considered a cost of holding inventory, as it is a separate financial risk associated with extending credit to customers. The other options (opportunity cost of funds, storage and handling costs, and risk of obsolescence) are all typical costs associated with holding inventory.

Which of These Is Not Considered a Cost of Holding