Carrying costs


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Related to Carrying costs: Ordering Costs

Carrying costs

Costs that increase with increases in the level of investment in current assets.

Carrying Charge

1. The cost of storing a commodity over a period of time. It includes incidental costs, insurance coverage, and the physical cost of storage. It does not include depreciation, if any. The carrying charge is incorporated to the price of a commodity on the futures market.

2. In interest rate futures, the difference between the cost of purchasing an instrument and its yield. See also: Profit, Loss.

3. Fees a firm charges for making a loan. The largest single carrying charge is the interest, but it also includes charges such as an origination fee or an application fee. See also: All-in cost.
References in periodicals archive ?
R = Out-of-pocket receivable carrying cost per year, as a percentage of unit selling price
Logistics Market (2003) ($ billions) Carrying Costs (Subtotal: 300) Interest 17 Taxes, Obsolescence, Depreciation, Insurance 205 Warehousing 78 Transportation Costs Motor Carriers (Subtotal: 482) Truck--Intercity 315 Truck--Local 167 Other Carriers (Subtotal: 111) Railroads 38 Water (International 21, Domestic 5) 26 Oil Pipelines 9 Air (International 8, Domestic 20) 28 Forwarders 10 Shipper-Related Costs 7 Logistics Administration 36 Total Logistics Costs: 936 Note: Table made from bar graph.
Delaney of Cass Information Systems estimates that at a macrolevel, noncapital carrying costs are approximately 19 percent of inventory.
However, at some point, the costs of additional credit investigation will outweigh its benefits in terms of reduced bad debt and carrying costs. Investigation beyond this point will increase rather than decrease total costs.
Table 3 shows how the picture changed when accounts receivable and inventory carrying costs were included.
* The relationship between carrying costs and other inventory related costs (such as ordering costs).
Expenditure flexibility is adequate, with elevated carrying costs for debt service, pension and other post-employment obligations.
Inventory carrying costs in the United States rose a whopping 13.5% last year, far outpacing the overall U.S.
The district's carrying costs are driven primarily by debt service and consume 18.5% of governmental expenditures.
Record inventory carrying costs and rising transportation costs accounted for the increase.
And a 15-year tax abatement helps keep carrying costs low."
We predict that renovated apartments will continue to attract more interest, and that the sellers of properties needing renovation will have to account for both renovation and interim carrying costs to sell promptly.