Question

Differentiate between inventory carrying cost and ordering cost

Answer 1

Answer:

Economic Order Quantity: EOQ | Definition, Formula & Example Ordering costs are costs incurred on placing and receiving a new shipment of inventories. ... Carrying costs represent costs incurred on holding inventory in hand. These include opportunity cost of money held-up in inventories, storage costs such as warehouse rent, insurance, spoilage costs, etc.

Answer 2

Answer:

Ordering costs are costs incurred on placing and receiving a new shipment of inventories. ... Carrying costs represent costs incurred on holding inventory in hand. These include opportunity cost of money held-up in inventories, storage costs such as warehouse rent, insurance, spoilage costs, etc