APICS Certified Supply Chain Professional (CSCP) — Question 58

Which of the following cost elements typically would be included in the cost of carrying inventory?

Answer options

• A. Scrap during production
• B. Depreciation of product equipment
• C. Direct materials
• D. Obsolescence

Correct answer: D

Explanation

Obsolescence is a cost related to inventory as it reflects the loss in value due to items becoming outdated or unsellable. The other options, while related to production or materials, do not directly pertain to the costs incurred specifically from carrying inventory.