Total Annual Inventory Cost (TAIC) is a formula used to calculate the cost of holding inventory over the course of one year. It takes into account several factors, including the value of goods in stock, purchasing costs, storage costs, insurance, quality control, and other expenses. The formula takes all of these elements into account to provide businesses with an accurate estimate of the total cost involved in carrying inventory. Knowing this figure can help businesses make better decisions about how much inventory to keep on hand, as well as where to source their materials. TAIC can also help businesses optimize their supply chain and lower their overall costs.