ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is not a benefit of carrying inventory
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Reduction in ordering cost
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Avoiding lost sales
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Reduction carrying cost
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Avoiding production shortage
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Explanation:
Detailed explanation-1: -Because carrying cost is reduced when inventory is diminished. Reducing Carrying Cost (C) is not a benefit of carrying inventories.
Detailed explanation-2: -Storage cost is not included in the cost of inventory.
Detailed explanation-3: -Inventory carrying costs include expenses incurred from storing, transporting, and handling inventory as well as labor costs incurred in those processes. They also include taxes, insurance, item replacement, depreciation, and opportunity costs.
Detailed explanation-4: -Avoiding Lost Sales. Gaining Quantity Discounts. Reducing Order Cost. Achieve Efficient Production Runs. Reducing risk of production shortages.
There is 1 question to complete.