Any cost associated with having,as opposed to not having,inventory is included in inventory carrying costs,including (1)capital costs, (2)inventory service costs, (3)storage space costs,and (4)inventory risk costs.

Inventory Carrying Costs

The total cost associated with holding inventory, including storage, handling, depreciation, and opportunity costs.

Capital Costs

Expenses incurred to create or acquire fixed assets, such as buildings or machinery, that are used in producing goods or services.

Inventory Service Costs

Expenses associated with storing, handling, and managing inventory, including warehousing and insurance costs.