Author Question: List at least 3 examples of carrying costs associated with holding ... (Read 45 times)

danielfitts88 · **on:** Jun 24, 2018

List at least 3 examples of carrying costs associated with holding inventory.

Question 2

How is the stock reorder point calculated?

verrinzo · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

interest on money borrowed to buy the inventory, property taxes on the inventory's value, insurance, storage costs, and loss from theft, damage, or obsolescence

Answer to Question 2

Multiply the daily usage by the average number of days needed for new stock to be delivered. Add to this any amount of safety stock desired to ensure you will not run out of stock. This amount is the reorder point.