One of the elements comprising a company's total supply chain management costs. These costs consist of the following:

1. Materials (Commodity) Management and Planning All costs associated with the supplier sourcing, contract negotiation and qualification, and the preparation, placement, and tracking of a purchase order - including all costs related to buyer/planners.

2. Supplier Quality Engineering: The costs associated with the determination, development/certification, and monitoring of suppliers' capabilities to fully satisfy the applicable quality and regulatory requirements.

3. Inbound Freight and Duties: Freight costs associated with the movement of material from a vendor to the buyer, including all associated administrative tasks. Duties are those fees and taxes levied by government for moving purchased material across international borders. Customs broker fees should also be included in this category.

4. Receiving and Put Away: all costs associated with taking possession of material and storing it. Note - inventory-carrying costs are normally covered in a separate worksheet.

5. Incoming Inspection: All costs associated with the inspection and testing of received materials to verify compliance with specifications.