When the item is used in production or is a spare part for a production machine,shortage costs in the perishable product model include the cost of lost production

Question

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Shortage costs in the perishable product model include the cost of lost production when the item is used in production or is a spare part for a production machine. This means that if there is a shortage of the item, it will result in a loss of production, which will incur additional costs.

When the Item Is Used in Production or Is a Spare