If we are ordering materials from an outside vendor,then the total inventory-related cost on an annual basis is given by the sum of ______.
A)total annual ordering cost,total annual holding cost,total annual stock-out cost,total annual materials purchase cost
B)total annual setup cost,total annual holding cost,total annual stock-out cost,total annual materials purchase cost
C)total annual ordering cost,total annual holding cost,total annual safety stock cost,total annual materials purchase cost
D)total annual setup cost,total annual holding cost,total annual safety stock cost,total annual materials purchase cost

Question

Quizplus · Accepted Answer

When ordering materials from an outside vendor, the total inventory-related cost on an annual basis is made up of four components: total annual ordering cost, total annual holding cost, total annual stock-out cost, and total annual materials purchase cost. Therefore, the best choice is A - total annual ordering cost, total annual holding cost, total annual stock-out cost, and total annual materials purchase cost.

If We Are Ordering Materials from an Outside Vendor,then the Total