Free tool

Inventory carrying cost calculator

Inventory costs money twice: the capital tied up in it, and the cost of holding it. Enter your own numbers to see your annual carrying cost, what a rise in input prices adds, and how much working capital a leaner inventory would release. Nothing is stored unless you ask us to email you the result.

Your numbers

₹ Cr
₹ Cr

Enables days of inventory.

% per year

Your borrowing cost or WACC.

% per year

% of inventory value per year.

% per year
% per year
%

For reference, India's wholesale inflation (WPI) was 11.39% in September, with manufactured products at 9.76% (source).

TranslytiX clients have released 5–20% of working capital.

Your result

Enter your average inventory value, cost of capital, and storage and handling rate to see your result.

Carrying rate

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Annual carrying cost today

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Carrying cost after the price increase

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Extra capital tied up by inflation

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Working capital released at 5% lower inventory

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Carrying cost saved per year

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How it's worked out: your carrying rate is the sum of cost of capital, storage and handling, insurance and taxes, and obsolescence. Annual carrying cost is inventory value × carrying rate. After the price increase, the same units are worth inventory value × (1 + increase), and cost that × carrying rate to hold. Working capital released is the inflated inventory value × the reduction you test; the carrying cost saved is that amount × carrying rate.

An estimate from your inputs, not a quote or a guarantee.

See which stock is locking up your capital

Email me the result

Fill in the required numbers above first.

How to read your result

The carrying rate is what each rupee, dollar or dirham of stock costs you a year. The inflation line is cost with no added service: the same units, worth more, costing more to hold. The release line is what better planning could return to the business.

Lower it without hurting service

  • Re-set safety stock by SKU and location, based on demand variability, lead-time variability and the service level each product actually needs.
  • Separate buy-ahead decisions from replenishment, with an explicit view of the price risk and the cost of holding the extra stock.
  • Rebalance before you buy. Moving stock between warehouses is usually cheaper than buying more of it.

Read more in Inventory carrying cost rises twice when inflation hits or see how TranslytiX does it on our inventory optimization software page.

Frequently Asked Questions

Questions, Answered

The annual cost of holding stock: cost of capital, storage and handling, insurance and taxes, and obsolescence or damage, usually expressed as a percentage of inventory value.

Carrying cost is a percentage of inventory value. When replacement prices rise, the same units are worth more, so they cost more to hold as well as more to buy.

By setting safety stock per SKU and location, separating buy-ahead decisions from replenishment, re-planning on demand events and rebalancing stock between locations before buying more.