ECONOMICS

Detailed explanation-1: -Carrying cost includes the cost of renting the warehouse where the stock is kept, operating the warehouse, paying the salaries of the employees working at the warehouse, any loss of inventory due to theft and damage, and insuring the inventory.

Detailed explanation-2: -Carrying costs are the various costs a business pays for holding inventory in stock. Examples of carrying costs include warehouse storage fees, taxes, insurance, employee costs, and opportunity costs.

Detailed explanation-3: -Storage cost is not included in the cost of inventory.

Detailed explanation-4: -Key Takeaways The costs associated with holding inventories in hand are referred to as carrying costs. Both costs are part of calculating economic order quantity. The carrying costs of the inventory are inversely connected to the ordering costs.