Inventory Carrying Costs Components Considerations
The cost of carrying inventory is used to help companies determine how much profit can be made on current inventory. The cost is what a business will incur over a certain period of time, to hold and store its inventory. The carrying cost of inventory is often described as a percentage of the inventory value. This percentage can include: TaxesEmployee costsDepreciationInsuranceThe cost of insuring and replacing items There are four main components to the carrying cost of inventory:...