Your Company Keeps 15 Days of Materials Inventory on Hand

question 53

Multiple Choice

Your company keeps 15 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $5,000 per day. A competitor keeps 12 days of inventory on hand, and the competitor's carrying costs average $3,000 per day. The value-added costs are

• A)$0.
• B)$5,000.
• C)$30,000.
• D)$75,000.

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