Which of These Services Has the Lowest Inventory Carrying Cost

question 69

Multiple Choice

Which of these services has the lowest inventory carrying cost?

• A) restaurant
• B) automobile repair
• C) amusement park
• D) dry cleaner
• E) animal hospital

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Definitions:

Cost of Producing

The total expense incurred in the manufacture or production of a good, including raw materials, labor, and overhead.

Metal Alloy

A substance composed of two or more metals or a metal and a non-metal, mixed together to attain desired physical or chemical properties.

Fixed Proportions

A production technology assumption where inputs must be used in constant, unchanging ratios to produce outputs.

Average Cost

The total cost of production divided by the number of units produced, representing the cost per unit of output.