Inventory Carrying Cost
Finance
Inventory Carrying Cost
Annual cost of holding inventory, including capital, storage, handling, insurance, shrinkage and obsolescence.
Examples
- 01The company calculates an inventory carrying cost of 22 % per year, so EUR 1 million in stock costs EUR 220,000 annually.
- 02The quarterly review shows inventory carrying cost by warehouse, including storage, insurance and obsolescence write-offs.
- 03Cutting slow-moving stock by EUR 500,000 saves around EUR 110,000 a year in inventory carrying cost.