MANAGEMENT

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: -Ordering costs are the costs that a company spent to place an order for supplies. Making a purchase order and the labor cost associated with orders are some examples of ordering costs. Setup costs are incurred to make equipment or asset ready to process the goods from raw form of material to finished product.

Detailed explanation-3: -Ordering, holding, and shortage costs make up the three main categories of inventory-related costs.

Detailed explanation-4: -Ordering costs are considered expenses related to placing orders for new inventory. Transportation, shipping fees, inspection fees, and other expenses for conveying the order come under it. These costs are generally fixed in nature. These costs are a component in calculating the economic order quantity (EOQ).