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Sir how come
Purchase cost is also a part of inventory costs ?
Because
Purchase department is different from inventory department
Holding cost is inventory cost
Ordering cost is also inventory cost
Because this is happening in the inventory departmentBut
Purchasing is done by purchasing department so why purchase cost is a inventory cost ?If you are referring to inventory control (which is seems you are because of your mentioning of holding costs and ordering costs) then the purchase cost is not an inventory cost (although it may obviously be relevant in the calculations if there are quantity discounts, as explained in my lectures).
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