What does the cost of inventory include?

Inventory cost is the total cost in the whole inventory process. Including:

1, order cost.

2. The purchase cost, that is, the cost of purchasing or producing the product, is related to the purchase volume or production volume.

3. Inventory holding cost refers to the cost incurred for maintaining inventory, which usually refers to the cost incurred from warehousing to warehousing.

4. Out-of-stock costs, including shutdown losses caused by supply interruption of raw materials, losses caused by delayed delivery and loss of sales opportunities caused by inventory shortage of finished products, and emergency extra procurement costs borne by enterprises to solve inventory interruption by emergency procurement.

5. Logistics cost, that is, the cost of transporting goods from suppliers to warehouses and from warehouses to users.

Extended data

Inventory holding cost

1, inventory holding cost is the cost to be borne by maintaining and managing inventory. It can be divided into three aspects: operating cost, opportunity cost and risk cost.

2. Operating costs mainly include storage costs. Self-operated warehouse is embodied in the amortization expense of fixed investment in warehouse construction, and outsourced warehouse is embodied in warehouse rent. The higher the inventory, the larger the storage area and the higher the storage cost.

3. In addition, operating costs also include equipment investment costs and daily operating expenses (water, electricity, labor, etc.). ) In the warehouse. Opportunity cost is mainly the opportunity cost brought by the occupation of funds by inventory. As an asset of an enterprise, inventory is obtained by occupying the working capital of the enterprise.

4. Any enterprise has a certain rate of return on capital investment, that is, if the funds occupied by inventory are not used for inventory, the average income that can be obtained by operating other investments. This ratio varies from industry to industry, generally ranging from 65,438+00% to 65,438+06%.

reference data

Baidu Encyclopedia-Inventory Cost