Which of the following will change if the firm does not hold the safety stock? (Select the best answer below.) A. Carrying Cost, Total Inventory Cost, and Reorder Point B. Reorder Point, Economic Order Quantity, and Order Cost C. Total Inventory Cost, Reorder Point, and Economic Order Quantity D. Order Cost, Carrying Cost, and Total Inventory Cost

The following will change if the firm does not hold the safety stock (A) Carrying Cost, Total Inventory Cost, and Reorder Point

Explanation:

Safety stock is used to represent the surplus stock that is used to  describe a level of extra stock which  is maintained to mitigate the  risk of stock outs

(1) order cost, will not change as the firm will need to place same number of order. The order cost is the fixed clerical cost of placing and receiving orders.

(2) carrying cost, is a variable cost and it will decrease as the average level of inventory will decrease

(3) total inventory cost, Inventory cost will decrease due to the decrease in carrying cost

(4) Reorder point, will reduced as no safety stock cushion is being  maintained.

(5) economic order quantity.

Hence we can say that the following will change if the firm does not hold the safety stock (A) Carrying Cost, Total Inventory Cost, and Reorder Point

answer; 33,000;