Which of the following is not a component of inventory carrying cost?
i) capital cost
ii) transportation cost
iii) insurance cost
iv) obsolescence cost.
check this link may be help you
http://www.remassoc.com/portals/0/remwpicc.pdf
http://www.strategosinc.com/admin/buy/cc/CC_Guide02_sample.pdf
http://help.rigaku.com/ITDocLib.nsf/vwWDocumentsByCategory/3735AA4C5782090786257328005785EB/$file/v3_cycle&pi.pdf
http://www.distributiongroup.com/articles/DCM060112webextraB.pdf
Dear Sen
The answer is option no. 2 i.e. TRANSPORTATION COST.
Please follow this link
https://www.bayt.com/en/specialties/q/128419/which-of-the-following-is-not-considered-a-cost-of-carrying-inventory/
The cost of inventory is not solely determined by the direct expenses associated with storing, managing, and maintaining the goods, but also by the opportunity costs that arise when money is tied up. Goods represent a store of value; keeping resources tied up in products or components that are not being utilized or sold immediately restricts a company's overall cash flow and may reduce the amount of liquid capital available. Inventory management requires a careful balancing of all these costs against the benefits of having more goods or inputs available on demand.
As a rough rule of thumb, many sources, including the Re-shoring Initiative, use 25 percent of a product's unit price as an estimate of annual carrying costs per unit. However, the actual number for any specific company, product, or component may be considerably higher.
In addition to the costs of carrying inventory onshore in the United States, companies must also consider the carrying costs of inventory in transit. It is easy to overlook the carrying costs associated with these products because they are not sitting in a warehouse, but they form part of a company's overall inventory and represent money that is tied up in goods. They also require the payment of insurance, consideration of the ultimate need for scrap and rework, and other factors. Companies must be mindful not to disregard the cost of carrying inventory that has not yet arrived at its final destination, especially given the amount of time this inventory will spend in transit and the associated financing costs.
With regards
Usually, transportation cost.
However, if the inventory is stored at a particular hub (either centralized or decentralized) as an alternative to direct ship, then some companies count this extra transportation cost.
I think , we should not include in inventory carrying cost transportation and capital cost.
The transportation cost. This cost is usually included in the material cost (when you paid the transportation for unit) or in the order cost when you use a full truck
Hi all,
The cost of the transportation should be part of the inventory holding cost, because it's used to calculate the landed cost of the material. Either we pay (Inco-term
Transportation cost. Although internal transportation and material handling can be considered as carrying cost!
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