Costing Tools
How To Calculate Ordering Cost
Use this template to calculate the cost and effectiveness of your procurement department as a first step to calculating ordering cost. Understanding the true logistic-related costs is the first step to improved logistics management.
What it does
Use this template to calculate the cost and effectiveness of your procurement department as a first step to calculating ordering cost. Understanding the true logistic-related costs is the first step to improved logistics management.
See it in action
A worked example
Each cost line is counted at the share that belongs to ordering, then the total is divided by the number of purchase orders.
| Cost line | Amount | Share counted | Counted amount |
|---|---|---|---|
| Buying team time | £1,000 | 50% | £500 |
| Order processing systems | £500 | 100% | £500 |
| Total | £1,000 |
£1,000 over 100 orders is £10 per order.
What data it needs
We will list the data this Tool-module needs when it is ready to launch.