APICS Certified Supply Chain Professional (CSCP) — Question 117

Which of the following inventory-related costs typically is used only for decision making?

Answer options

• A. Carrying costs
• B. Procurement overhead
• C. Demurrage
• D. Obsolescence

Correct answer: D

Explanation

Obsolescence costs are associated with inventory that is no longer sellable due to changes in demand or technology, and these costs help organizations make informed decisions about inventory management. In contrast, carrying costs, procurement overhead, and demurrage are ongoing costs that affect operational budgets rather than strictly decision-making processes.