Inventory Carrying Cost Calculator

Capital cost: Opportunity cost of money tied up in inventory
Storage: Warehouse rent, utilities, equipment
Insurance: Coverage for inventory loss/damage
Taxes: Property or inventory taxes
Obsolescence: Products becoming outdated, damaged, or stolen
Handling: Labor to manage, count, and move inventory

Calculate the true cost of holding inventory and optimize your stock levels.

How Carrying Cost is Calculated

This calculator sums all costs of holding inventory:

What is inventory carrying cost?: Inventory carrying cost is the total expense of holding and storing unsold goods. It typically ranges from 20-30% of inventory value annually, including capital cost, storage, insurance, taxes, obsolescence, and handling.
Why is carrying cost important?: Understanding carrying cost helps optimize inventory levels. Too much inventory ties up capital and increases costs. Too little risks stockouts. The goal is finding the balance that minimizes total costs.
What is EOQ?: Economic Order Quantity (EOQ) is the optimal order size that minimizes total inventory costs (ordering + carrying). It balances the cost of placing orders against the cost of holding inventory.