Anya, a sales manager for Pacific Lumber, tells Ricardo, the firm's inventory manager, that the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. Which of the following inventory management costs does this figure represent?

Question

Quizplus · Accepted Answer

The $175,000 in lost sales represents a stockout cost, which occurs when inventory is insufficient to meet demand, leading to lost sales and customer dissatisfaction.

Anya, a Sales Manager for Pacific Lumber, Tells Ricardo, the Firm's