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Carrying vs. Stockout Cost
Inside this lesson
- Compute carrying cost as quantity times holding cost per unit.
- Compute expected stockout cost as stockout probability times stockout cost.
- Find total relevant cost and explain why it is U-shaped in the stocking level.
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Educational content only. This course explains inventory and working-capital control concepts and the math behind them; it is not financial, accounting, investment, or professional certification advice, makes no recommendations, and predicts no cost, cash, or business outcomes. All figures are illustrative synthetic teaching examples. Consult a qualified professional before making financial or business decisions.