Setup or Ordering Costs Operations Management Assignment Help

Setup or Ordering Costs

These are fixed cost- usually associated with the production of a lot internally or the placing of an order externally with a vendor. In other words. these costs are independent of the number of units that are requested. Setup costs are related to the amount of time needed to adjust the equipment to perform a specific task. This would include the alignment of special tooling such as jigs and fixtures. Order costs pertain to the costs involved in placing an order a vendor. These may include telephone charges, a delivery fee, expediting costs, and the time required to process a purchase order.

Posted by: anderson

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