What Is the Formula to Calculate Total Carrying Cost

question 10

Multiple Choice

What is the formula to calculate total carrying cost?

• A) number of orders per year/cost of placing an order
• B) number of orders per year × cost of placing an order
• C) average number of units in inventory / cost of carrying one unit in inventory
• D) average number of units in inventory × cost of carrying one unit in inventory

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Definitions:

Availability Heuristic

A cognitive bias that causes people to overestimate the likelihood of events based on their ability to recall examples.

Nuclear Power

The use of nuclear reactions to generate heat, which is then used in power plants to produce electricity without emitting greenhouse gases during the process.

Personal Judgment

The process of forming opinions or conclusions based on one's own perception, experience, or information.

Heuristics

Mental shortcuts or rules of thumb that the brain uses to simplify decision making, which can be efficient but may lead to cognitive biases.