ENTREPRENEURSHIP

ENTREPRENEURIAL OPERATIONS

INVENTORY MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following costs is a relevant inventory stockout cost under EOQ decision model?
A
The costs of obsolescence and costs of insurance that change with the quantity of inventory held.
B
The return forgone by investing capital in inventory rather than elsewhere.
C
The lost profit on sales forgone as a result of customer dissatisfaction due to unavailability of goods.
D
The costs of storage space owned that cannot be used for other profitable purposes when inventories decrease.
Explanation: 

Detailed explanation-1: -The economic order quantity increases with higher demand and higher carrying costs and decreases with higher ordering costs.

Detailed explanation-2: -Holding costs (H) Holding cost (also known as carrying costs) refers to the total cost of holding inventory. Annual demand (D) Order cost (S) 26-Feb-2020

There is 1 question to complete.