What does the purchase cost include?

Procurement costs include the following:

1. Purchase order expense: refers to the expenses related to the purchase order, including the expenses of order preparation, review, approval and release.

2. Management expenses of purchasing planner: refers to the salary, bonus and welfare expenses of purchasing planner.

3. Purchasing personnel management expenses: refers to the salary, bonus, welfare, training and other expenses of purchasing personnel.

4. Transportation cost: refers to the cost of transporting purchased raw materials, spare parts or articles from suppliers to the company.

5. Loading and unloading expenses: refers to the expenses incurred in the process of loading and unloading, including labor costs and equipment costs.

6. Insurance premium: refers to the insurance premium for purchasing raw materials, spare parts or articles.

7. Other expenses that can be attributed to the purchase cost of inventory: such as storage expenses, packaging expenses, reasonable loss in transit, sorting expenses before warehousing, etc.

8. Procurement cost refers to the total cost of purchasing goods or services, including direct costs and indirect costs. Direct costs include direct costs such as the price of goods or services, taxes, transportation fees and insurance premiums. Indirect costs include all procurement-related expenses, such as the salary of the personnel in the procurement department, the examination and approval expenses in the procurement process, and the maintenance expenses of the procurement system. In industrial enterprises, procurement costs involve other hidden costs related to procurement, such as capital occupation caused by inventory backlog, shutdown cost caused by waiting materials, and cost caused by quality problems.