The supplier for Omega Corporation has offered the company a 5 percent discount if it will order more units less frequently.If Omega accepts the supplier's offer,the cost of carrying inventory will _____ and the cost of running out of inventory will _____.
A)rise,stay the same
B)fall,decrease
C)rise,decrease
D)fall,stay the same

Question

Quizplus · Accepted Answer

Ordering more units less frequently will result in an increase in inventory, which will increase the cost of carrying inventory. Additionally, ordering less frequently may increase the risk of running out of inventory, which will increase the cost of running out of inventory. Therefore, if Omega accepts the supplier's offer, the cost of carrying inventory will rise, and the cost of running out of inventory will decrease.

The Supplier for Omega Corporation Has Offered the Company a 5