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In: Operations Management

Which of the following is not considered a holding cost? Interest Insurance Depreciation Opportunity cost Stock...

Which of the following is not considered a holding cost? Interest Insurance Depreciation Opportunity cost Stock out cost

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Expert Solution

The correct option is

Stock out cost

Stock out cost is the cost which will occur when the firm is not having the stock. Suppose a customer has gone to a shop and ask for 5 pens worth $25. Now the shopkeeper do not have pen. So the shopkeeper has lost the opportunity to earn $25. So there is no inventory hence this is not a type of holding cost.

keosha answered 1 year ago
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