Question

Anya, sales manager for Pacific Lumber, tells Ricardo, the firm's inventory manager, that the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. This figure represents which of the following inventory management costs?

A. Replenishment
B. Stockout
C. Safety stock
D. Carrying
E. Reorder

Answer 1

The correct answer is B

Step-by-step explanation:

Stockout or OOS stands for Out of Stock, which is event that causes the inventory to be exhausted. It occur with the entire supply chain.

In this case, Firm is facing failure for having adequate or enough supplies on hand, which result in the lost sales amounts to $175,000. It is representing the Stockout in the inventory management costs.