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Which of the following is the correct statement about total ordering cost?
Correct Answer: B
Typically, ordering costs include expenses for a purchase order, labor costs for the inspection of goods received, labor costs for placing the goods received in stock, labor costs for issuing a supplier's invoice and labor costs for issuing a supplier payment. These costs are irrelevant from the size of the order and are incurred every time a firm places an order. The total ordering cost will be equal to ordering cost per order multiply with number of orders.