Order-processing costs must be compared with inventory-carrying costs because as the amount of stock carried increases, the higher the inventory-carrying costs.

Question

Quizplus · Accepted Answer

As the stock carried increases, the cost of holding that stock in inventory also increases. Therefore, order-processing costs must be compared with inventory-carrying costs to determine the optimal amount of inventory to carry.

Order-Processing Costs Must Be Compared with Inventory-Carrying Costs Because as the Amount