③Inventory ordering costs
(transaction costs)
Ordering costs include the purchasing agent's salary and travel/entertainment budget, administrative and secretarial support, office space, copiers and office supplies, forms and documents, long-distance telephone bills, and computer systems and support. Also, some firms include the cost of shipping the purchased goods. It varies very much, depending on company routines.
Marketing and Operations Inventory increases responsiveness to demand and ability to achieve economies of scale
What ’s inventory?
Inventory refers to stocks of good that are maintained for a variety of purposes,such as for resale to others,as well as to support manufacturing or assembling processes.
Inventory in manufacturing and distribution Normally considered: raw materials purchased parts (components) work in process (WIP) finished goods (unsold, undelivered) maintenance/repair/ operating (MRO)