Question

What is your company's Inventory Carrying Cost rate? (Ask your Director of Logistics or the CFO. If that's not possible, provide an estimation using all 4 categories presented in class.) Do you think it's an accurate computation, a good estimate or a not-even-close estimate? Recommend one action that should be taken to improve the accuracy of this number.

Answer 1

The inventory carrying cost rate is 20% to 30%

Step-by-step explanation:

The Inventory carrying cost is the expense that a company has to incur in order to hold the inventory in its warehouse till the orders are received. This cost is different for every business as it depends on the properties of inventory. The perishable goods are more expensive to hold and the carrying cost will be high for such inventory.