The official business definition of Cost of Holding Inventory is the total cost associated with storing and maintaining inventory. This includes the cost of the inventory itself, the cost of storing the inventory, the cost of managing the inventory, and the cost of any related taxes or fees. It also includes the cost of any losses due to theft, damage, or obsolescence. The cost of holding inventory is an important factor in inventory management and should be taken into consideration when making decisions about inventory levels. It is important to keep inventory costs as low as possible to maximize profits and ensure efficient operations. By understanding the cost of holding inventory, businesses can make informed decisions about how much inventory to keep on hand and when to replenish it.
