The nurse manager needs to determine the most economical level of inventory, because supplies represent a significant cost factor. To keep costs down, the nurse manager places small orders frequently. This is an example of reducing what kind of cost?
a. Order cost
b. Carrying cost
c. Short cost
d. Stock-out cost
ANS: B
The carrying cost is the expense involved in holding inventories. To keep carrying costs down, the nurse manager should place small orders frequently.
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Fill in the blank(s) with the appropriate word(s).