How to Calculate Inventory Carrying Cost
What is Inventory Carrying Cost?
Carrying Cost Calculator helps logistics and supply chain professionals optimize operations and reduce costs.
Formula
Carrying Cost = Inventory Value × Carrying Rate (20–30% annually)
Step-by-Step Guide
- 1Apply industry carrying rate to average inventory value
- 2Apply the formula with your specific values
- 3Use the result to optimize operations or costs
Worked Examples
Input
$100,000 inventory, 25% rate
Result
Annual Carrying Cost = $25,000
Common Mistakes to Avoid
- ✕Using incorrect units or dimensions in the calculation
- ✕Ignoring surcharges and accessorial fees
Ready to calculate? Try the free Inventory Carrying Cost Calculator
Try it yourself →