Definitions for "Ordering cost"
In the economic order quantity model, this is the cost of preparing a purchase order and the cost of receiving the goods ordered. To Top
The cost of placing an inventory order with a supplier.
The total of all costs associated with the creation and release of a purchase order and its receipt, inspection and putaway as required. In calculating order quantities, the cost of placing a large number of individual orders is balanced against the cost of carrying inventory due to placing fewer orders with larger quantities on each.