For a given firm, holding other factors constant, ordering costs per unit generally
A) decline as average inventory increases.
B) increase in proportion to increases in inventory.
C) are considered fixed costs.
D) are negotiated.

Question

Quizplus · Accepted Answer

Ordering costs generally include expenses like placing an order, receiving and inspecting the order, and updating inventory records. As the firm's average inventory increases, the number of orders placed decreases, leading to a decline in ordering costs per unit.

For a Given Firm, Holding Other Factors Constant, Ordering Costs