The major relevant costs in maintaining safety stock are:
Variant question
A)ordering costs and stockout costs.
B)stockout costs and carrying costs.
C)ordering costs and purchasing costs.
D)carrying costs and purchasing costs.

Question

Quizplus · Accepted Answer

The major relevant costs in maintaining safety stock are stockout costs, which occur when demand exceeds supply and can result in lost sales or customer dissatisfaction, and carrying costs, which include the cost of holding inventory such as storage, handling, and insurance. Ordering costs relate to the cost of placing an order, and purchasing costs are the cost of buying inventory, but these are not specifically related to maintaining safety stock. Therefore, B is the best choice.

The Major Relevant Costs in Maintaining Safety Stock Are