PLEASE CHOOSE ONE ANSWER AND CLEARLY IDENTIFY THE CHOICE!!!

Purchasing professionals conduct a trade-off analysis between the costs of carrying extra inventory versus the costs of purchasing or making more frequently when determining order sizes. Inventory holding costs refer to the costs associated with holding or storing inventory over a period of time. Which of the following does NOT increase with the increased order size given total annual demand is fixed?

Storage Costs: the cost of storage facilities and equipment needed to store inventory, such as warehouse rent, utilities, insurance, and security.

Order Processing Cost: the costs associated with placing an order for a product, such as the cost of preparing purchase orders, communicating with suppliers, and receiving and inspecting the product upon delivery.

Opportunity Cost: the cost of capital tied up in inventory that could have been invested elsewhere, such as purchasing new machinery, research and development, or expanding the business.

Obsolescence and Deterioration: inventory that is not sold within a specific timeframe may become obsolete, outdated, or even damaged. This can lead to additional costs for disposal, write-offs, or markdowns.