Our glossary simplifies common industry terms in freight and logistics into clear, easy-to-understand explanations.
Inventory carrying cost is the comprehensive expense a company incurs for holding inventory, including capital tied up, storage fees, insurance, shrinkage, obsolescence risk, and management costs. Inventory cost directly impacts gross profit and cash flow and is a core metric for supply chain optimization. Companies can reduce Inventory Costs through demand forecasting, ABC classification, economic order quantity (EOQ), safety stock strategies, and VMI/consignment sales. Combined with automated warehousing and digital replenishment, a balance can be achieved between service levels and inventory turnover.
Subscribe to our newsletter to be the first to get the latest logistics trends, professional insights and exclusive offers. Never miss an opportunity to improve efficiency and optimize costs.
