Free calculator
Inventory Carrying Cost Calculator
Free Inventory Carrying Cost Calculator with instant browser-based results and a clear calculation breakdown.
📦 Inventory Carrying Cost Calculator
Instructions: Calculate the total annual cost of holding inventory. Enter your average inventory value and the various cost components as percentages or dollar amounts. The calculator will determine your total carrying cost and percentage.
Total Annual Carrying Cost
$0.00
Cost of Capital:
$0.00
Storage & Warehousing:
$0.00
Insurance:
$0.00
Obsolescence & Shrinkage:
$0.00
Taxes & Other:
$0.00
Total Carrying Cost Rate:
0.0%
How it's calculated:
Each cost component is calculated by multiplying the average inventory value by its respective percentage rate. The total carrying cost is the sum of all components.
Formula: Total Carrying Cost = Average Inventory Value × (Sum of All Cost Percentages / 100)
What it means: Inventory carrying costs represent the total expense of holding inventory over a period (typically one year). This includes opportunity costs (capital tied up), physical storage, insurance, risk of obsolescence, and other related expenses. Lower carrying costs indicate more efficient inventory management.
Each cost component is calculated by multiplying the average inventory value by its respective percentage rate. The total carrying cost is the sum of all components.
Formula: Total Carrying Cost = Average Inventory Value × (Sum of All Cost Percentages / 100)
What it means: Inventory carrying costs represent the total expense of holding inventory over a period (typically one year). This includes opportunity costs (capital tied up), physical storage, insurance, risk of obsolescence, and other related expenses. Lower carrying costs indicate more efficient inventory management.
Want to understand the calculation?
Read the guideSee examples, formula notes and limitations.