To manage its inventories efficiently, KC Mart, a supermarket, enters into a five-year contract with Ziff Corp., an information technology firm. As per the contract, KC Mart has to pay $125,000 per year to Ziff Corp. in exchange for the information regarding consumer purchase behaviors. In the given scenario, the cost that KC Mart has to incur is the _____.
A) processing cost
B) acquisition cost
C) retrieval cost
D) storage cost

Question

Quizplus · Accepted Answer

The cost that KC Mart has to incur is the acquisition cost, as it is paying Ziff Corp. in exchange for the information regarding consumer purchase behaviors. Processing cost refers to the cost incurred in converting raw data into useful information, retrieval cost refers to the cost incurred in accessing stored data, and storage cost refers to the cost incurred in maintaining physical or digital storage of data.

To Manage Its Inventories Efficiently, KC Mart, a Supermarket, Enters