Total Ordering Costs Equal the Number of Orders Multiplied by the Cost

question 43

Short Answer

Total ordering costs equal the number of orders multiplied by the cost per __________.

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Definitions:

Investment Center

A division or unit within an organization that is directly responsible for generating its own revenue as well as controlling its costs, and therefore, its profits.

Authority

The ability or entitlement to dictate actions, decide on matters, and demand adherence.

Decision

The act of making a choice or coming to a conclusion.

Investment Turnover

A financial ratio that measures how effectively a company uses its assets to generate sales revenue; a higher turnover indicates better performance.