Pharmacy Ordering Costs

Ordering costs are those costs associated with placing an order and processing the corresponding payment. They include costs such as bank charges associated with payment for the pharmaceuticals, phone calls, etc. Any costs associated with receiving the goods and getting them to the shelves for dispensing can also be included. Usually, ordering costs are not separately identified, since they are comparatively small for a number of products. However, for others especially liquid formulations dispensed in large unit volumes, such cost may be significant. Either way, it is important that such costs are duly recognized and factored in in the cash outflow.
Putting the order on the shelves is also considered part of routine daily duties of the pharmacy staff; although, if significant, these costs could also be identified separately. Though, if an institution wishes to make bulk purchases of intravenous supplies and these orders require additional outlays, such as off-site storage and labor to unload and re-distribute when needed, these costs should be added to the overall purchase price when placing orders.
Carrying Costs
Not all items in inventory generate the same level of profits. Further, some items require more inventory space than others. This is where the third basic inventory cost, …show more content…
When the final calculated inventory value in a pharmacy’s accounting records is compared with the final valuation from the physical inventory, any shortage is referred to as shrink. Inventory shrink is expressed in the actual Naira amount difference, or as a percentage of the total inventory balance. Shrink may be due to pilferage, either from customer or employee. Proper controls over access to inventory and good housekeeping by pharmacy managers can contribute greatly to keeping inventory shrink to a minimum. Theft of inventory occurs across in all types of business both retail and