ordering cost

Ordering Costs

Transaction costs associated with placing an order to buy or sell a security. Perhaps the most common ordering cost is the fee for the broker.

ordering cost

the cost of placing an order for raw materials or components or machines, which includes management and clerical time, stationery, postage and other PURCHASING department costs. See STOCKHOLDING MODEL.
References in periodicals archive ?
Additionally, fixed ordering cost is incurred for placing each order.
Ordering cost is the cost of making requisition of raw material from the supplier.
Our model also allows for the ordering cost of the special one-time only order to be different from the retailer's regular ordering cost.
E]) is the sum of the cost of delivered goods, inventory ordering cost, and carrying cost, or:
where Q is the order quantity (units/sku - order), D is the demand rate (units/time - year)), S is the variable ordering cost ($/sku - order), I is the variable holding cost ($/$ - year), C is the unit cost of the item ($/unit), and 1/2is a multiplier (sku - order)
K = the fixed ordering cost incurred ([US$]/[order]) each time an order is placed.
as the order quantity increases, ordering costs fall; and
A lower level of total costs (prices, ordering costs, management costs, etc.
There are three types of costs in the model: (1) holding costs calculated as given unit costs times end inventory, (2) stockout costs calculated as given unit costs times stockout level occurred, and (3) ordering costs which are calculated if the end inventory is below the re-order point defined at the beginning of the simulation.
inventory costs are just one group of total supply chain costs and they encompass ordering costs, holding costs and shortage costs (that occur if demand exists, but the product is out of stock).
What is more, all the equipment comes from one reliable, proven source, thereby enabling reduced ordering costs, simplified pre-delivery inspection, single team installation and commissioning and extensive after sales support.
The implementation of e-procurement drastically reduces the ordering costs incurred by companies.