Ordering Cost Refers to the Expense of Placing an Order

question 1

Multiple Choice

Ordering cost refers to the expense of placing an order and

• A) includes the cost of capital.
• B) relates to the material management concept.
• C) does not include the price of the product.
• D) not receiving it.

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Definitions:

Materiality

The significance of information or an event in influencing decisions or actions based on its potential impact.

Innocent Misrepresentation

A false statement made by one party to another without knowing it was false, which may lead to the rescission of a contract.

Material

Important. In securities law, a fact is material if a reasonable person would consider it important in his decision to purchase shares or to vote shares.

Rescind

To withdraw, negate, or overturn a law, order, or agreement.