How do You Calculate Inventory Holding Costs?


Inventory holding costs are calculated by determining the actual cost of the inventory. The cost of inventory is multiplied by the investment value as if you had not bought the inventory and invested the money.
2 Additional Answers Answer for: how do you calculate inventory holding costs
How to Calculate Inventory Holding Costs
Inventory holding costs are costs a firm has when keeping inventory. Companies often try to reduce the amount of inventory they have on hand to reduce inventory holding costs. The less time inventory is on hand, the less storage costs for the company and... More »
Difficulty: Moderately Easy
To calculate inventory holding costs, determine the total amount spent in regards to the storage and handling of inventory. Then determine the total amount of obsolete inventory and spoilage. The total amount spent in storage and handling less obsolete and spoiled inventory is the inventory holding cost.
Q&A Related to "How do You Calculate Inventory Holding Costs?"
1. Sort through the receipts relating to inventory. Find any receipt that has to do with storage of inventory, such as storage rental and handling costs. This can also include any
what is the role of ordering cost and carrying cost in calculating the EOQ. what is the role of ordering cost and carrying cost in calculating the EOQ.
The cost of inventory sold is calculated by adding the totals that are listed in question 2.
Even I am not sure about the costing methods or algorithms and the calculations involved.. If you would be able to give me a pseudocode of the logic involved, I would be able to give
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