What is the formula to calculate ordering cost?
A)number of orders per year × cost of placing an order
B)number of orders per year/cost of placing an order
C)average number of units in inventory × cost of carrying one unit in inventory
D)average number of units in inventory/cost of carrying one unit in inventory

Question

Quizplus · Accepted Answer

Ordering cost can be calculated by multiplying the number of orders placed each year by the cost of placing an order. This formula takes into account the expenses incurred each time an order is placed, such as administrative costs, shipping fees, and processing fees.

What Is the Formula to Calculate Ordering Cost