Show Answer (Detailed Solution Below)Option 3 : Cost of inspection of incoming material Free 20 Questions 20 Marks 20 Mins Explanation: Inventory-carrying costs usually consist of the following elements:
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Inventory procurement, storage and management is associated with huge costs associated with each these functions. Inventory costs are basically categorized into three headings:
Current times, the trend is increasingly in favor of outsourcing the inventory management to third party service provides. For one thing the organizations find that managing inventory operations requires certain core competencies, which may not be inline with their business competencies. They would rather outsource to a supplier who has the required competency than build them in house. Secondly in case of large-scale warehouse operations, the scale of investments may be too huge in terms of cost of building and material handling equipments etc. Besides the project may span over a longer period of several years, thus blocking capital of the company, which can be utilized into more important areas such as R & D, Expansion etc. than by staying invested into the project. Authorship/Referencing - About the Author(s)The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a target="_blank" href="https://www.managementstudyguide.com/inventory-classification.htm" id="next">next</a> </div> <script src="https://code.jquery.com/jquery-2.1.4.min.js" type="83197d2c36beaa8f3d47216e-text/javascript"> <script type="83197d2c36beaa8f3d47216e-text/javascript"> |