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What are Holding Costs?

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Holding costs are business expenditures related to goods that are held in supply chain facilities such as warehouses. These include rent, utilities, security, shrinkage and other costs direct related to storage.
In many industries, a rule of thumb is used that holding costs represent about one third the value of goods over a year. This approximation would predict that if you hold $1 million of plastic Christmas trees in storage for a year, it would result in total holding costs of about $333,333.
Overview: Holding Costs
Type
Business Costs
Definition
The costs of holding inventory.
Related Concepts
Shrinkage
Supply Chain Management

Business Costs

This is the complete list of articles we have written about business costs.
Abatement
Applied Cost
Business Equipment
Capacity Cost
Capex
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Carrying Costs
Closing Costs
COGS
Cost Of Capital
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Cost Of Living
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Holding Costs
Intangible Cost
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Menu Costs
Relevant Cost
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Normal Costs
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Step Costs
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