costs

Marginal costs

1) The costs of producing one further unit of output, or performing above the standard (ie when all fixed/overhead costs have been recovered). In transport, for example, the additional costs of adding an extra delivery when all fixed costs of the route have been covered by the other deliveries (ie leaving just the extra fuel, vehicle wear and driver time to be recovered).

Re-order costs

1) The total cost of placing a repeat order for an item either externally with a supplier or for internal manufacture. The costs may include elements to cover: order preparation, administration, IT overheads, correspondence, telephone, transportation, goods inward processing, inspection and for manufacture, batch set up costs and other production overheads. (Source: ILTSupply-Chain Inventory Management SIG)