Answer
Six cost categories important in managing goods for sale in a retail organization are the following:
1. purchasing costs
2. ordering costs
3. carrying costs
4. stockout costs
5. costs of quality
6. shrinkage costs
Work Step by Step
Six important cost categories in managing goods for sale in a retail company are:
1. Purchasing Costs: The expenses associated with acquiring inventory, including the actual cost of goods, shipping, and handling.
2. Ordering Costs: Expenses related to the process of placing orders for new inventory, such as administrative and transaction costs.
3. Carrying Costs: The costs of holding and storing inventory, including warehousing, insurance, and financing expenses.
4. Stockout Costs: The financial impact of not having sufficient inventory to meet customer demand, including lost sales and potential customer dissatisfaction.
5. Costs of Quality: Expenses related to ensuring the quality of goods, including inspection, testing, and quality control procedures.
6. Shrinkage Costs: Costs associated with losses of inventory due to theft, damage, spoilage, or other factors.
