Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory is a(n) ________.
A) purchasing cost
B) ordering cost
C) stockout cost
D) carrying cost

Question

Quizplus · Accepted Answer

Carrying cost is the cost of holding inventory, which includes storage, insurance, handling, and the opportunity cost of the capital invested in the inventory. Purchasing cost refers to the cost of acquiring inventory, ordering cost is the cost of placing an order for inventory, and stockout cost is the cost of running out of inventory and losing potential sales or customers.

Among Different Types of Costs Associated with Inventory, the Opportunity