Every business that maintains inventory has an optimal level that minimizes the total cost of all of the following EXCEPT:

Question

Quizplus · Accepted Answer

The optimal inventory level takes into account the cost of carrying inventory, processing orders, and the potential cost of losing sales due to being out of stock. However, it does not aim to minimize the cost of frequent purchases, as purchasing frequently can actually be beneficial in certain situations, such as when prices are likely to rise in the near future.

Every Business That Maintains Inventory Has an Optimal Level That