BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
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Detailed explanation-1: -Ordering, holding, carrying, shortage and spoilage costs make up some of the main categories of inventory-related costs.
Detailed explanation-2: -There are four main types of inventory: raw materials/components, WIP, finished goods and MRO.
Detailed explanation-3: -An inventory cost refers to all the costs associated with holding and the management of inventory. The costs include all expenses related to ordering, warehousing, protecting, and deteriorating costs.
Detailed explanation-4: -The inventory cost formula consists of beginning inventory value, ending inventory value, and purchase costs over a set period of time. More succinctly, it looks like: inventory cost = [beginning inventory + inventory purchases]-ending inventory.