Calculation of the Inventory Cost in a Supply Chain

Supply Chain and Quality Management


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Koen Vandermarliere
Business Consultant, Belgium

Calculation of the Inventory Cost in a Supply Chain

Hi, I'm trying to calculate the costs involved with keeping stocks in a supply chain. Who can help me? Im looking at different sectors at the moment, food, heavy industry, ICT Thanks.

Manager, India

Calculation of the Inventory Cost in a Supply Chain

I can provide the inputs to calculate the cost for stock keeping - Consider monthly total sales turnover, monthly finished goods cost to company, monthly money comes to account, monthly total overhead cost to company. Cost of stocks lying in FG / semi FG shall also be considered.

  a j reddy
Business Consultant, India

Inventory Cost Assessment

This is possible and can be estimated. It can become accurate if we consider to use process management and are identifying the variables to build the model for calculation by inputting the values of variables. This can even be made to provide information on a real time basis too.

Student (MBA), Saudi Arabia

Inventory Cost Calculation

Calculation of inventory cost depends on several factors which are related to sales and current stock items.
But in simplistic terms, if your inventory is $500,000 and we assume that 22% of this is the annual cost then the inventory costs is $500,000 * 22% = $110,000 per year.

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