ACCA MA · Chapter 4 · Question 11 of 11
Which of the following is an inventory holding cost?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Insurance of inventory kept in the warehouse
Explanation
Holding costs grow with the amount of inventory held, for example insurance, storage, obsolescence and the cost of capital tied up. Administration and delivery charges per order are ordering costs, and lost contribution is a stockout cost.
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