ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Among different types of costs associated with inventory, the costs of obtaining purchase approvals are ____
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purchasing costs
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ordering costs
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stockout costs
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holding costs
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Explanation:
Detailed explanation-1: -Ordering cost is a set overhead expense that doesn’t change throughout the year. Shipping fees, unforeseen transportation charges, inspection fees, and other costs associated with acquiring inventory items might all be included in these ordering expenses.
Detailed explanation-2: -Two important categories of inventory costs are ordering costs and carrying costs. Ordering costs are costs that are incurred to obtain additional inventories, whereas carrying costs are the costs incurred to hold inventory on hand. The total inventory cost is the ordering cost plus the carrying cost.
Detailed explanation-3: -Capital costs. Storage space costs. Inventory service costs. Inventory risk costs. 06-Nov-2020
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