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QUESTION 7 Inventory carrying costs consist of: I Cost of Capital employed in the inventory investment Il Inventory Service costs like taxes and insurance IlII Inventory Storage costs IV Inventory risk costs like obsolescence, theft, and damage I is correct I and Il are correct , I, andl are correct I, II, and IV are correct All are correct

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Question 7

The correct answer is "All are correct".

Inventory management is the process by which inventory and stock items are supervised. Inventory management is the proper management of flow of goods from manufacturers to warehouses to the point of sale. Economic order quantity is the optimal quantity that minimize the inventory cost. The total ordering cost and holding cost are the optimal level of order quantity and order cost of inventory is directly proportional to the EOQ. Holding cost or carrying cost is nothing but percentage of inventory value which include taxes, insurance, cost of storage, opportunity cost, depreciation, cost of good damaged, labor cost, utilities cost, etc.

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