Question

The reasons to carry inventory include all of the following except:

O Setup and ordering cost
O Customer service and variation in demand
O Labor and equipment utilization
O Transportation costs
O Interest and opportunity cost

Answer 1

The reasons to carry inventory include setup and ordering cost, customer service and variation in demand, labor and equipment utilization, and transportation costs.

Step-by-step explanation:

The reasons to carry inventory include setup and ordering cost, customer service and variation in demand, labor and equipment utilization, transportation costs, and interest and opportunity cost. All of these reasons have different implications for a business. For example, carrying inventory helps to meet customer demand by ensuring that products are available when needed. It also helps to minimize the costs associated with ordering and shipping products. Additionally, carrying inventory can help to optimize labor and equipment utilization by allowing for more efficient production processes. However, the reasons for carrying inventory do not include interest and opportunity cost, as these are financial costs associated with holding inventory.