Carrying charge

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Related to Holding cost: Ordering Cost, Shortage cost

Carrying charge

The fee a broker charges for carrying securities on credit, such as on a margin account. Also, any component of a futures basis, such as storage costs, interest charges or insurance costs on the underlying interest.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The influence of variation in ordering cost, holding cost, and purchase cost in terms of discounts and price breaks on the order quantity and minimum cost is studied for the proposed algorithm.
Analysis of Item 2 shows lack of model to more accurately estimate on-hand units, hence relative errors of average inventory level and holding cost are some high.
In calculating the order fill rate, for example, dataset 1, a standard deviation of 2.5% of demand and a holding cost 20% of average unit cost are used.
Total inventory holding cost also includes the part of these items returned from the market in a production cycle, which is (h/2)[[E.sub.1](1 - [gamma])q/D + ([[summation].sup.n.sub.i=2] [E.sub.i](1 - [gamma])[beta]q)/D], as we can see from Figure 9.
Increasing safety stock reduces cost, mainly because the saving in setup cost outweighs the increase in holding cost. After safety stock exceeds a certain level, the situation reverses, and cost increases as safety stock inreases.
Quite a few production and inventory control models assume the holding cost is variable.
She also realized that there are other costs such as inventory holding cost. She rated the purchasing price along with supplier selection as the most important cost-drivers, covering 90 percent of the costs.
(iii) New inventory cost ([hc'.sub.j]) represents the changed holding cost by operation j.
As the unit holding cost increases, there is a decrease in the marginal value of an item in the future periods, because it is more costly to carry a unit to the next period.
Total Cost: The total cost components consist of production cost, setup cost, holding cost, shortage cost, defective cost and cost of quality.
TWO warnings for holding cost Northallerton heavyweight Elliott Crow (Wellington) dear as he bowed out of the national Senior Novice Championships in a 5-1 Class A semi-final defeat to Coventry's Nigel Burton at Everton Park Sports Centre on Merseyside.