Carrying costs
9 months
The total cost of holding inventory, including maintenance, storage, warehouse, and scrap costs, is known as the carrying cost of inventory. Carrying costs are the expenses related to holding and storing inventory over time. This also includes insurance, opportunity costs, and loss from theft and/or damage.
The formula to calculate carrying costs is as follows:
Carrying cost (%) = Inventory holding sum / Total value of inventory x 100
