Which category of inventory holding costs is much higher than average for rapid-change industries such as PCs and cell phones?
A) housing costs
B) material handling costs
C) labor cost
D) parts cost
E) pilferage, scrap, and obsolescence

Question

Quizplus · Accepted Answer

Pilferage, scrap, and obsolescence costs are generally much higher in industries where products quickly become obsolete or outdated, such as the PC and cell phone industries. This is because these products have short lifecycles and the demand for the latest and greatest models often results in older products becoming unsellable and eventually being scrapped or written off as obsolete. In addition, the risk of theft or pilferage is higher in industries with high-value, small items such as cell phones and computer components.

Which Category of Inventory Holding Costs Is Much Higher Than