Ordering costs
A)the costs of not having a product available when demanded by a customer
B)the costs of carrying inventory
C)approach that maintains goods should be pulled through the system by present demand
D)the number of units in the order quantity that minimizes the total cost
E)the costs of placing and receiving an order

Question

Quizplus · Accepted Answer

Ordering costs refer to the costs associated with placing and receiving an order. This includes costs such as paperwork, communication, transportation, and inspection. Therefore, the best choice is E. Options A, B, and C refer to other concepts related to inventory management, such as stockout costs, holding costs, and just-in-time (JIT) approach, respectively. Option D refers to the economic order quantity (EOQ), which is used to determine the order quantity that minimizes both ordering and holding costs.

Ordering Costs