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　　4.2 Ordering costs
　　Every time an order is placed to purchase materials an order cost is incurred. The costs associated with placing orders are known as ordering costs and include administrative costs and delivery costs.
　　Order cost can be reduced by placing orders only at infrequent interval. However, this means that order quantities need to be large, to avoid the risk of running out of stock between orders. Such a policy would result in high average levels of stock, which increases holding costs.
　　There is a conflict between the need to minimize holding costs (small orders, at frequent intervals) and the need to minimize order costs (large orders, at infrequent intervals)
 
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