Which of the following is not affected by decisions about how much inventory to hold?a.ordering costsb.holding costsc.item costsd.depreciatione.stockout costs
Question
Which of the following is not affected by decisions about how much inventory to hold?a.ordering costsb.holding costsc.item costsd.depreciatione.stockout costs
Solution
The option that is not affected by decisions about how much inventory to hold is d. depreciation. Depreciation is the decrease in value of a physical asset over time due to wear and tear, age, or obsolescence. This is not directly influenced by the amount of inventory a company decides to hold. The other options (ordering costs, holding costs, item costs, and stockout costs) are all costs that can vary depending on the amount of inventory a company decides to keep on hand.
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