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.

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R = Out-of-pocket receivable carrying cost per year, as a percentage of unit selling price

Inventory and credit decisions under day-terms credit linked demand and allowance for bad debts

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.

The two faces of globalization: globalization may be keeping consumer prices low, but it's creating new challenges for logistics managers

Delaney of Cass Information Systems estimates that at a macrolevel, noncapital carrying costs are approximately 19 percent of inventory.

The real cost of holding inventory. (Decisions)

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.

Credit investigation: can there be too much of a good thing?

Table 3 shows how the picture changed when accounts receivable and inventory carrying costs were included.

Marketing costs: back to basics

* The relationship between carrying costs and other inventory related costs (such as ordering costs).

Uniform capitalization rules and inventory planning

Expenditure flexibility is adequate, with elevated carrying costs for debt service, pension and other post-employment obligations.

Fitch Affirms Port Huron, MI's IDR and GOs at 'A'; Outlook Stable

Inventory carrying costs in the United States rose a whopping 13.5% last year, far outpacing the overall U.S.

Inventory costs rise dramatically

The district's carrying costs are driven primarily by debt service and consume 18.5% of governmental expenditures.

Fitch Ratings assigns 'AAA' rating based on Texas Permanent School Fund bonds

Record inventory carrying costs and rising transportation costs accounted for the increase.

Logistics costs on the rise

And a 15-year tax abatement helps keep carrying costs low."

Muss development a splash hit

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.