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Which of the following is the cost involved in holding goods in a warehouse? 1. Facility cost 2. Processing cost 3. Inventory cost 4. Transportation cost Processing cost Facility cost Inventory cost Transportation cost

Question

Which of the following is the cost involved in holding goods in a
warehouse?
1. Facility cost
2. Processing cost
3. Inventory cost
4. Transportation cost
Processing cost
Facility cost
Inventory cost
Transportation cost

Which of the following is the cost involved in holding goods in a warehouse? 1. Facility cost 2. Processing cost 3. Inventory cost 4. Transportation cost Processing cost Facility cost Inventory cost Transportation cost

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MarshallProfessional · Tutor for 6 years

Answer

Inventory cost. As it directly tackles the expenses of holding unsold goods in the warehouse.

Explain

## Step 1<br />The question asks for the particular cost associated with storing goods in a warehouse. The options provided include facility cost, processing cost, inventory cost, and transportation cost.<br /><br />## Step 2 <br />Each of these costs corresponds to a different part of warehouse operations:<br />1. Facility cost refers to the expenses associated with maintaining the physical location of the warehouse such as rent, utilities and maintenance.<br />2. Processing cost typically refers to the cost involved in converting raw materials to finished goods, which may not be directly applicable to a warehouse that primarily stores goods.<br />3. Inventory cost is the cost related to storing goods that are not yet sold. This includes costs such as storage, obsolescence, and shrinkage (theft, damage etc).<br />4. Transportation cost involves the logistics of moving goods to and from the warehouse, which doesn't directly apply to the cost of holding goods in the warehouse.
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