Question

 What is an inventory carrying cost?

 What is an inventory carrying cost?

Answer 1

Inventory carrying cost refers to the expenses associated with holding goods in a warehouse or storage facility. These costs include rent, insurance, utilities, labor, and taxes, among others. The longer inventory is held, the higher the carrying cost.

Answer 2

Inventory carrying cost is the cost of holding and storing inventory over a certain period of time. It includes expenses such as storage costs, insurance, taxes, obsolescence, depreciation, and opportunity cost of tying up capital. The longer the inventory is held, the higher the inventory carrying cost. Effective inventory management aims to minimize inventory carrying cost by optimizing inventory levels, reducing excess inventory, and improving inventory turnover. By reducing inventory carrying cost, companies can improve their profitability, cash flow, and return on investment.

Answer 3

Inventory carrying cost refers to the expenses incurred by a business to hold and maintain inventory, including warehousing, storage, insurance, obsolescence, and opportunity cost of tied-up capital.