So is that different than net landed cost.
In procurement bets practices, ever evolving terminologies can get you into trouble if you don’t understand the slight differences or assume terms have the same meaning.
The landed cost is the total cost of acquiring and shipping a product. It is the total price paid by a retailer till they receive the goods. The common charges involved are shipping costs, customs fees, insurance, and overheads.
The Economic Order Quantity is the size of an order at which the totally procurement and inventory carrying cost is at the lowest possible threshold. The formula can be used to determine production levels or order interval lengths and is used by large corporations around the world. The components for the formula include the demand for the year, cost to place a single order, and the cost to hold one unit of inventory for a year.
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