Free tool
Inventory holding cost calculator
See what it really costs to keep your stock on the shelf — capital, storage, handling, insurance and shrinkage, and obsolescence — as a rate and an annual amount.
% / yr
Your borrowing rate, or the return you'd otherwise earn.
% / yr
Rent, power and racking for stock space ÷ average stock value.
% / yr
% / yr
% / yr
Value written off last year ÷ average stock value.
RESULT
- Holding cost rate
- 25.0% a year
- Monthly holding cost
- 10,417
- Annual holding cost
- 125,000
Amounts are in the same currency as the inventory value you enter.
How it works
- Holding cost rate = capital % + storage % + handling % + insurance and shrinkage % + obsolescence %.
- Annual holding cost = average inventory value × holding cost rate.
- Per-unit holding cost = unit cost × holding cost rate — the H in the EOQ formula.
StashBill does this automatically for every item and invoice. See all features or try the other free tools.
Frequently asked
Holding cost (or carrying cost) is the total cost of keeping unsold inventory over a period, usually a year: money tied up, space, handling, insurance, losses, and the risk it expires or goes out of date.
15–30% of inventory value per year is a commonly used range. Your figure depends mainly on your cost of capital, rent, and how much stock you write off.
Divide the yearly rent, power and racking cost of the space your stock occupies by your average inventory value. ₹25,000 of storage cost on ₹5,00,000 of average stock is 5%.
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