Annual Holding Cost

Also known as: carrying cost

Annual holding cost (or carrying cost) is the total yearly expense of storing unsold inventory, including warehousing, insurance, tied-up capital, and obsolescence. It's typically calculated as average inventory value multiplied by the holding cost rate, and it's a key input for reorder and EOQ decisions.

In the warehouse: Teamship's WMS puts Annual Holding Cost to work as part of Inventory Management.