Operating shortage costs that result from lost production and sales are caused by

Question

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Operating shortage costs can result from any of the factors mentioned in options A, B, and C. If an organization does not hold enough raw materials, it may not be able to produce goods as quickly as required, leading to lost production and sales. Similarly, if it runs out of finished goods, it may be unable to fulfill customer orders, leading to lost sales. Lastly, if it has restrictive sales policies, it may not be making as many sales as it could, leading to lost revenue. All these factors can contribute to operating shortage costs.

Operating Shortage Costs That Result from Lost Production and Sales