An average inventory in units is multiplied with annual relevant carrying cost of each unit to calculate

A. annual irrelevant ordering costs

B. annual relevant carrying costs

C. annual relevant ordering costs

D. annual irrelevant carrying costs

Answer: Option B

Solution(By Examveda Team)

An average inventory in units is multiplied with annual relevant carrying cost of each unit to calculate annual relevant carrying costs. Carrying costs are the costs of holding inventory and include maintenance, specifically in regard to perishable items, and storage costs.