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CIPS Exam L4M7 Topic 10 Question 16 Discussion

Actual exam question for CIPS's L4M7 exam
Question #: 16
Topic #: 10
[All L4M7 Questions]

Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory belongs to which of the following?

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Suggested Answer: C

For single items, an extra investment in inventory (higher levels of safety stock) will always in-crease customer service levels. Conversely, higher service levels imply larger quantities of safety stocks and an increased investment in inventory. (Procurement and Supply Chain Management - 9th Edition)


LO 2, AC 2.2

by Arlette at Apr 24, 2023, 07:14 PM

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Raymon
17 days ago
I'm not sure, but I think it might be acquisition costs because that's the cost of obtaining the inventory in the first place.
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Inocencia
22 days ago
I agree with Tatum, holding costs make sense because it's the cost of keeping inventory in stock.
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Tatum
23 days ago
I think the opportunity cost belongs to holding costs.
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