Final answer:
The cost of lost sales is an opportunity cost associated with determining the number of warehouses a firm needs. It represents the potential revenue foregone due to not having products available where there is demand, in contrast to explicit costs like warehouse and transportation costs.
Step-by-step explanation:
An opportunity cost in business refers to the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Among the options provided, the cost of lost sales is the opportunity cost associated with the decision on how many warehouses a firm needs. This is because lost sales represent potential revenue that the firm foregoes when the goods are not available at the location where the demand exists, perhaps due to inadequate warehousing. Other costs mentioned, like warehouse, inventory, transportation, and workers' compensation costs, are considered explicit costs. These are the actual payments made for day-to-day operations, as opposed to the implicit cost of lost opportunities.
For instance, if a firm chooses not to open an additional warehouse in a certain location to save on immediate expenditures, it may lose out on potential sales in that area, which is an opportunity cost of that decision. Efficient warehouse placement and management could help reduce shipping times and costs, while also preventing loss of sales due to products not being in the right place at the right time.