CIPS Level 4 Whole Life Asset Management L4M7 · Free Practice Question Easy
Question 2
What category of inventory costs includes the opportunity cost of the money invested in inventory?
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A
Costs of stockouts
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B
Acquisition costs
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C
Purchase price
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D
Holding costs
Reveal correct answer
Correct answer: D
Explanation
Direct and indirect costs of holding inventory include the following:
- Acquisition costs
- Holding costs: There are 2 different types of holding costs: costs related to the value of the goods (including opportunity costs, costs of insurance, losses due to product deterioration, etc) and costs related to the physical characteristics of this inventory.
- Costs of stockouts
Reference: CIPS study guide page 100-101
LO 2, AC 2.2
Discussion
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