ocr: Ordering Costs Ac certain tixed cost will be incurred each time stock IS reordered. This willinclude the administrative costs incurred in the purchasing department as well as. any transportation costs relating to the delivery of the stock. Stock-out costs These are the costs associated with running out of stock at a particular point in time. For example: Profit trom lost current sales Profit trom lost future sales itc customers permanently transter to rival businesses Any costs relating to "rush" orders. e.g. the business may have to procure raw materials at short notice and therefore become l ...
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