The Annual Inventory Carrying Cost Formula is an important tool for businesses to calculate the total cost of keeping their inventory throughout the year. This formula takes into account expenses such as storage, insurance, taxes, and estimated shrinkage due to product damage or obsolescence. By using this data, companies can make informed decisions regarding their inventory levels and optimize their supply chain operations. Not only does this help lower costs, it also ensures that they have enough inventory on hand to meet customer demands. Ultimately, the goal of the Annual Inventory Carrying Cost Formula is to increase profits while providing excellent service to customers.