CIPS Level 4 Diploma in Procurement and Supply L4M7 Question # 74 Topic 8 Discussion
L4M7 Exam Topic 8 Question 74 Discussion:
Question #: 74
Topic #: 8
Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory belongs to which of the following?
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]
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