which reason for holding inventory is exemplified when a firm builds up stock because they anticipate rising profit levels in th

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Natali [406] · Answer 1 · 2024-02-13T22:49:15+03:00

The expenses incurred for keeping goods or inventory in a warehouse are known as inventory holding costs.

<h3 /><h3>What is inventory holding cost?</h3>

The expenses incurred for keeping goods or inventory in a warehouse are known as inventory holding costs.
Inventory that is kept on hand is a liability that reduces profit margins and raises operating costs for firms.
Inventory holding expenses include rent for the facility, security fees, depreciation costs, and insurance.
To reduce stock-out costs, merchandise is kept on hand.
To ensure that no consumer leaves empty-handed, all businesses must forecast the demand for their products and maintain inventories of raw materials, finished goods, work-in-progress, and consumables.
Within a single supply chain, inventory holding costs are computed as a portion of the overall inventory costs.
Storage, insurance, labor, transportation, depreciation, shrinkage of the inventory, spoilage of the inventory, obsolescence, and opportunity costs are some of the costs.

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