The cost of carrying for a commodity with storage costs.
Storage costs are the amounts you incur to store your inventory. Costs are direct or indirect money spent on storing goods. Storage costs include space, rent, electricity, software, depreciation and warehouse staff costs.
Storage costs include warehousing costs, material handling costs, labor costs, and air conditioning costs. Therefore, the storage cost formula is: Storage cost = warehouse running cost + material handling cost + labor cost + air conditioning cost + (onsite cost x square foot area).
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