4 INVENTORY CARRYING COSTS THAT CAN KILL PROFITS
Inventory carrying costs include all of the costs you incur by stocking material in your warehouse or in your store. These costs are split in four parts:
The annual amount of these costs is accumulated and divided by the average inventory investment. The carrying cost is expressed as a percentage and the values currently range on average between 15–20 percent.
Take Action To Reduce Inventory Carrying Costs
NPA has evolved multiple best practice approaches to increase the inventory profitability. An example would be the systematical reduction of excess stock or the optimization of the order management via forecasting to minimize order costs.
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