Answer (D) is correct . Inventory carrying costs are incurred to hold inventory. Examples include the costs of storage, insurance, security, inventory taxes, depreciation or rent of warehouse facilities, obsolescence and spoilage, and the opportunity cost of inventory investment. Inspection costs are not related to the length of time inventory is held. They are costs of taking delivery and are best classified as ordering costs.
Answer (A) is incorrect because Storage and obsolescence and spoilage are inventory holding costs.
Answer (B) is incorrect because Insurance and obsolescence and spoilage are inventory holding costs.
Answer (C) is incorrect because Opportunity cost of inventory investment, and obsolescence and spoilage are inventory holding costs.
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