The objective of an inventory system is the minimization of total operating costs. The unavoidable costs of operating pure inventory systems are ___________.
A) ordering costs, stocking costs, and holding costs
B) ordering costs, stocking costs, and holding costs.
C) shipping costs, stockout costs, and pricing costs
D) ordering costs, delivery costs, and holding costs
E) ordering costs, stockout costs, and backorder costs

Question

Quizplus · Accepted Answer

The unavoidable costs of operating pure inventory systems are ordering costs (costs associated with placing an order), stocking costs (costs of having inventory on hand), and holding costs (costs of storing inventory). The other options (C, D, E) include costs that may not necessarily be associated with inventory systems or are avoidable with effective inventory management.

The Objective of an Inventory System Is the Minimization of Total