As an inventory manager, Lindina Wells has decided to place one large order for a particular type of jeans to cover her needs for the next six months. She is obviously more concerned with ____ than with ____.

Question

Quizplus · Accepted Answer

Lindina Wells is placing a large order to cover her needs for the next six months, which indicates that she is more concerned with stock-out costs (the potential costs of running out of inventory and not being able to fulfill customer demand) than holding costs (the costs associated with storing inventory). Placing a large order may increase holding costs, but this is secondary to avoiding stock-out costs.

As an Inventory Manager, Lindina Wells Has Decided to Place