White Planet Electronics is a company that sells the various inventories required by other companies to manufacture electronic gadgets. It spends $500 every month on a storage facility that manages and stores the parts. In this scenario, the money spent by White Planet Electronics toward the storage facility for the protection of the company's goods is called _____.
A) ordering cost
B) setup cost
C) holding cost
D) stockout cost

Question

Quizplus · Accepted Answer

The money spent by White Planet Electronics toward the storage facility is a holding cost. Holding cost is the cost of maintaining inventory including storage, handling, insurance, and other related costs. It is incurred to keep the inventory in good condition and to protect it from damage, theft, and obsolescence.

White Planet Electronics Is a Company That Sells the Various