Which three costs must a manager measure to find the best inventory level?

1. The best inventory level is the one where total cost is lowest, so the costs have to be named first. 2. The first is the cost of holding inventory, which rises as stock rises. 3. The second is the cost of frequent reordering, which rises as stock falls and orders become more numerous. 4. The third is the cost of not keeping enough inventory on hand, which is the cost of running short. 5. Managers must measure all three and try to minimize them together rather than any one alone. 6. The other options list real business costs, but none of them moves up or down with the inventory level, so none of them helps set it. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section Inventory Management: Not Just Parts_