Facility Costs; Inventory holding costs which includes rental on warehousing, mobile and static equipment, utilities, compliance costs e.g. for dangerous goods.
Human Capital: Cost of labor to manage the stock and to move it, handle it and count it.
Finance costs; When capital is tied up in inventories the cost of finance (interest), and/or lost opportunity cost of gaining returns elsewhere must be counted.
Management Costs; White collar personnel and IT costs Procurement Costs; Cost of purchase, including transport.
2 comments:
I love the pictures and you invaluable explanation to the inventory management concept. It is of great help to my company?
I forgot to list one of the important cost elements of holding stock. I will talk about that in my next blog. So watch out
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