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

Question

Business

Itsy

23 June, 07:18

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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Answers (1)

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Tyson Hooper · Answer 1

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.