Question

Which of the following costs is NOT considered an inventory holding (or carrying) cost?

1) Ordering cost
2) Storage cost
3) Insurance cost
4) Transportation cost

Answer 1

Transportation cost is not considered an inventory holding cost.

Step-by-step explanation:

The cost that is NOT considered an inventory holding (or carrying) cost is Transportation cost.

Inventory holding costs refer to the expenses incurred by a company to maintain and store inventory. These costs include expenses such as warehousing, insurance, and obsolescence.

Transportation costs, on the other hand, are associated with the movement of goods from one location to another. While transportation costs are an important aspect of supply chain management, they are not considered inventory holding costs because they do not directly contribute to the storage and maintenance of inventory.