The correct answer is: D. Stock-out Cost
Stock-out cost is the cost of not having enough inventory on hand to meet customer demand. This can include costs such as lost sales, customer dissatisfaction, and damage to the company’s reputation.
Carrying cost is the cost of holding inventory, such as the cost of storage, insurance, and obsolescence.
Total cost is the sum of carrying cost and stock-out cost.
A is incorrect because carrying cost is the cost of holding inventory, not the cost of not carrying sufficient inventory.
B is incorrect because holding cost is the cost of storing inventory, not the cost of not carrying sufficient inventory.
C is incorrect because total cost is the sum of carrying cost and stock-out cost, not the cost of not carrying sufficient inventory.