ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total ordering costs equal the number of orders multiplied by the cost per ____
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order
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shipment
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medication
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supply
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Explanation:
Detailed explanation-1: -Ordering costs are the expenses your company incurs to purchase and receive the products it stocks in its inventory. These ordering costs can include shipping fees, unexpected transportation costs, inspection fees and other expenses necessary to acquire inventory products.
Detailed explanation-2: -Because you are trying to balance these two costs (one which increases as re-order quantity increases and one which falls), total costs will always be minimised at the point where the total holding costs equals the total ordering costs.
There is 1 question to complete.