The cost of keeping inventory on hand, including the opportunity cost of invested funds storage and handling costs, taxes, insurance, shrinkage, and obsolescence-risk costs. Firms usually state an item’s holding cost per time period as a percentage of the item’s value, typically between 20-40 percent per year.
The cost of keeping inventory on hand, including the opportunity cost of invested funds storage and handling costs, taxes, insurance, shrinkage, and obsolescence-risk costs. Firms usually state an item’s holding cost per time period as a percentage of the item’s value, typically between 20-40 percent per year.