If the Ordering Cost Is $1000, the Buying Cost Is

question 42

Multiple Choice

If the ordering cost is $1000, the buying cost is $ 1500, the cost of maintaining the inventory is $500, and the cost of lost sales due to stock-outs is $4000, the company must:

• A) Increase the inventory carrying cost
• B) Stock up more
• C) Reduce inventory
• D) Decrease the quality of inventory

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for setting monetary policy, issuing currency, and regulating banks.

Interest Rates

The amount charged by lenders to borrowers for the use of assets, expressed as a percentage of the principal, and typically noted on an annual basis.

Excess Return

The return on an investment over the risk-free rate or over an investment's benchmark.

Rapid Growth

Rapid Growth refers to a significant and faster-than-average increase in the size, revenue, or market share of a company or economy.