Multiple choice

Directions: Choose the correct option and complete the sentence.

Cost incurred when a stock storage occurs and includes loss of sale, loss of goodwill etc is called

  1. discretionary cost

  2. policy cost

  3. ordering cost

  4. carrying cost

  5. out of stock cost
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Out of stock cost represents the financial impact of not having inventory available when needed. This includes lost sales, potential loss of customer goodwill, and the costs associated with emergency procurement.

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