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Carrying Cost

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Published on

Jul 18, 2025

Warehousing

Carrying Cost

Another term for inventory holding cost.

Carrying cost is synonymous with inventory holding cost and includes both physical storage expenses and opportunity costs of tied-up capital. A high carrying cost signals inefficiency and risk—especially with perishable or seasonal stock. For instance, a business holding excess winter jackets into spring will incur unnecessary carrying costs and risk markdowns.

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