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When holding cost is known and constant, it plays a crucial role in inventory management by facilitating the determination of order quantity and frequency. Holding costs are the costs associated with storing unsold goods, including warehousing costs, insurance, depreciation, and opportunity costs. Knowing these costs allows managers to make informed decisions regarding how much inventory to order and how frequently to place orders.

A constant holding cost simplifies the economic order quantity (EOQ) calculations, which are used to minimize total inventory costs, thereby balancing ordering costs and holding costs. By maintaining an understanding of holding costs, a business can optimize its inventory levels, reducing excess stock and associated holding costs while ensuring sufficient inventory to meet customer demand.

The other options do not appropriately reflect the implications of a known and constant holding cost. For example, the idea that holding costs vary with inventory levels contradicts the premise of them being constant. Additionally, holding costs do not inherently increase during high demand periods; instead, it is the demand forecast and purchasing decisions that are impacted. Lastly, holding costs are indeed relevant factors in inventory management, as they directly influence inventory strategy and decision-making processes.