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15 November, 13:50

Which of the following is NOT an example of an ordering cost for products purchased from a supplier? The cost of transmitting the order The cost of receiving the product The cost associated with processing the invoice The lost opportunity cost of not ordering from a lower-cost supplier The cost of handling the product

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  1. 15 November, 14:10
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    The lost opportunity cost of not ordering from a lower-cost supplier

    Explanation:

    Order cost can be defined as cost incurred when we create and processing an order to a supplier. It is included in economic order quantity for an inventory item. For example cost of labour that will inspect goods, cost of preparing a purchase order, and so on.

    The opportunity cost of not ordering from a least cost supplier is not considered ordering cost as it represents a cost we did not incur.
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