____ are calculated as Average Inventory in Units ´ Unit Price ´ Carrying Cost per Year.
A) Quality costs
B) Ordering costs
C) Inventory carrying costs
D) MRO costs
E) Cycle counting costs

Question

Quizplus · Accepted Answer

The formula given in the question is the formula for calculating Inventory carrying costs. Therefore, option C is the correct answer. Quality costs are costs associated with ensuring that products and services meet customer requirements. Ordering costs are incurred when placing an order for inventory. MRO costs are related to maintenance, repair, and operations. Cycle counting costs are incurred for regular inventory counting purposes. None of these are calculated using the formula given in the question.

____ Are Calculated as Average Inventory in Units ´ Unit