Holding cost in inventory is an important concept in business that refers to the costs associated with storing and maintaining inventory. It is an important factor in the overall cost of inventory and can have a significant impact on a company’s bottom line. Holding cost includes costs such as storage, insurance, taxes, depreciation, obsolescence, and shrinkage. These costs can vary depending on the type of inventory being stored, the size of the inventory, and the length of time it is stored. Holding cost is also referred to as carrying cost, and it is important for businesses to accurately calculate and monitor their holding cost in order to ensure they are maximizing their profits. By properly managing their inventory, businesses can minimize their holding cost and maximize their profits.
