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Average purchase order processing cost

Average purchase order processing cost.

Details

Formula:

[total purchase order processing costs] divided by [number of purchase orders]


Unit: Money

Direction: Minimize

Unit: USD$


Listed in:
Tags: ,

Benchmark Results


This KPI is most used for:
Cost Leadership

Comments

  1. Diane P.

    what does the “total purchase order processing costs” encompase, is it salarries only or the budget for the cost centre?

    thanks

  2. H. M.

    for our practise in public sector firms, we use to calculate the following fo obtain the Total Purchase Order Procesing Cost:-
    1) Salaries of the concern’s employees.
    2) Any other employees expenses such as (Air Tickets, Annual leaves, Stationaries, Firnitures, Hardwares used during processing LPOs…)
    The above costs should be calculated for certain ideal lead time which is planned previously for issuing the captioned LPOs.

    cheers

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