Asked by
Joshua Gomez
on Oct 23, 2024
Verified
Which of the following are shortage costs?
A) Cost of disrupted production
B) Lost sales resulting in unsatisfied customers
C) Loss of quantity discounts on purchases.
D) All of the given answers
Shortage Costs
The costs incurred when demand exceeds supply, including lost sales, expedited shipping fees, and decreased customer satisfaction.
Disrupted Production
Interruptions in the normal flow of manufacturing processes due to unforeseen events, leading to delays and potential financial losses.
Lost Sales
The potential revenue that a company misses out on due to being out of stock, having insufficient capacity, or other reasons for not fulfilling customer demand.
- Distinguish among the different categories of costs such as ordering, carrying, and shortage, and their influence on the management of inventory.
Verified Answer
CJ
Learning Objectives
- Distinguish among the different categories of costs such as ordering, carrying, and shortage, and their influence on the management of inventory.