Ordering Costs
These are incurred in getting purchased items into the company’s inventory or stores, and usually consist of clerical costs of:
• Making the purchase demand.
• Issuing of a purchase order
• Follow-up action
• Receiving the goods
• Inspection for quality control
• Placing goods in stores
• Paying vendors (Suppliers)
Note:
The basic EOQ model assumes that these costs are fixed constant for each order made.