Estimate annual carrying cost from average inventory value and a user-supplied carrying-cost percentage.
Inventory Carrying Cost Calculator
Formula
How to use the result
The rate should reflect the costs you intentionally include, such as capital, space, insurance, handling, shrinkage and obsolescence; avoid double-counting.
What the calculator does not know
These tools are general inventory-planning aids, not accounting, tax, regulated-product, hazardous-material, food, pharmaceutical or safety-stock policy advice. Requirements for controlled, perishable or safety-critical inventory can be materially different; use applicable regulations, contracts, manufacturer requirements and qualified professional guidance.
Improve the estimate
Keep the inputs used for the decision and compare the estimate with actual results. A simple calculator is most useful when it makes the assumptions visible enough to learn from the difference.