Comments on: What is inventory carrying cost and how to reduce it? https://www.tc-rm.ru/blog/inventory-carrying-cost/ World’s #1 POS & RMS for Magento Mon, 06 Nov 2023 04:42:03 +0000 hourly 1 https://wordpress.org/?v=6.5.5 By: Joey https://www.tc-rm.ru/blog/inventory-carrying-cost/#comment-21296 Fri, 04 Nov 2022 05:31:45 +0000 https://www.tc-rm.ru/?p=10457#comment-21296 Can someone help explain… Inventory Carrying Cost supposedly helps you identify when you have too much inventory / holding it too long. However, the figure drops as you increase the inventory you have on hand. How is this helpful? Is it intended to work in tandem with turnover rate?

Example

Holding sum / inventory value = holding cost

Scenario A
$10,000 / $20,000 = 50% (bad)

Scenario B (more stagnant inventory)
$10,000 / $40,000 = 25% (good)

What gives?

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