A Methodology for Calculating Inventory Carrying Costs

Abstract

Inventory carrying costs represent one of the highest costs of distribution. Although they are a necessary input to the design of logistical systems, such costs are ignored by many companies and when they are used usually represent estimates or industry benchmarks. The authors present a methodology designed to provide managers with a practical framework for determining the costs of carrying inventory.

Citation

La Londe, B.J. and Lambert, D.M. (1977), "A Methodology for Calculating Inventory Carrying Costs", International Journal of Physical Distribution, Vol. 7 No. 4, pp. 193-231. https://doi.org/10.1108/eb014398