Insurance to protect inventory is a type of ______.
A)ordering costs
B)setup costs
C)stock-out costs
D)holding costs

Question

Quizplus · Accepted Answer

Insurance to protect inventory is a type of holding cost, as it is a cost incurred to maintain inventory in a safe and secure way. Holding costs are the expenses associated with storing and managing inventory, including insurance, rent, utilities, and labor. Ordering costs are the expenses related to placing and receiving orders, while setup costs involve the expenses incurred to switch production from one type of item to another. Stock-out costs are the losses associated with not having enough inventory to meet customer demand.

Insurance to Protect Inventory Is a Type of ______