This video discusses ordering costs. Ordering costs are all the costs associated with ordering inventory from a supplier. Ordering costs include, but are not limited to:
-time spent locating a supplier
-time spent negotiating with a supplier
-inspecting inventory for quality when it arrives
-processing purchase orders
-processing the payment
The ability to place orders online and the use of procurement cards (commonly known as “p-cards”) has significantly decreased the costs of ordering.