What are the two major costs associated with inventory?
A)ordering costs and setup costs
B)setup costs and stockout costs
C)stockout costs and carrying cost
D)ordering costs and carrying costs

Question

Quizplus · Accepted Answer

The two major costs associated with inventory are ordering costs and carrying costs. Ordering costs include the expenses related to placing an order (e.g. staff time, paperwork, communication), while carrying costs refer to the expenses of holding inventory (e.g. storage, insurance, security, obsolescence). Stockout costs and setup costs are also important inventory costs, but they are not the primary costs associated with inventory.

What Are the Two Major Costs Associated with Inventory