Calculating inventory costs involves more than just counting up a group of items. It’s a precise process that requires in-depth understanding of the cost of each item, as well as any associated expenses. At its core, calculating inventory cost requires an organization to identify the purchases they’ve made, their price, and any additional costs that may be involved. By examining all the information available, an organization can get a better sense of how much it is actually costing them to acquire their items. With this knowledge, organizations are able to better manage their inventories and make smarter decisions when it comes to their business operations.