Question: what are the costs associated with damaged goods and materials? 

Answer: the obvious ones:  the damaged goods\nnot so obvious:  the time spent reporting it, phoning suppliers, (because they are still going to invoice you, it left their shipping bay) phoning the shipper, providing proof of the value of the damaged items (digging up copies of the invoice).  The time spent getting rid of the damaged item (if it is large, like a furnace, you have to pay more shipping?)  Depending on the amount of damage, whether the item is usable, or parts can be taken off of it. \nAll that time you could have been doing something else that actually earns money for you...gone.
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