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Topic: Holding cost

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	Holding cost - Wikipedia, the free encyclopedia
		Holding cost also includes the opportunity cost of reduced responsiveness to customers' changing requirements, slowed introduction of improved items, and the inventory's value and direct expenses, since that money could be used for other purposes.
		While it is possible to measure the components of holding cost, it is common to estimate them as at least one-third the value of the stored goods per year.
		If opportunity cost is included, it is reasonable to use one-half the value of stored goods as their holding cost.
	en.wikipedia.org /wiki/Holding_cost (274 words)

	Supply Chain Management Review - The Real Cost of Holding Inventory (Site not responding. Last check: 2007-10-14)
		Expressed as a percentage, cost of capital is the average of the required return on equity and the interest rate on debt, weighted by the proportion of equity and debt, respectively, to total capitalization.
		Another flaw in the use of the short-term borrowing cost for the inventory cost of capital is that it does not consider the company's "targeted capital structure"—that is, what percentage the company desires in the long term to finance with debt (the sum of short-term and long-term debt) and what percentage to finance by equity.
		The cost of capital is 9 percent and is the after-tax weighted average cost of capital.
	manufacturing.net /scm/article/CA318372.html?nid=2184&rid=1782958173 (5074 words)

	[No title]
		The holding cost is charged against the inventory at the end of the period.
		This is the cost of holding inventory at the end of this period.
		Using the holding cost and setup cost with this demand generates an EOQ of 10 (after rounding) as shown near the bottom of the screen.
	www.prenhall.com /weiss_qmwin/html/lotsize.htm (1006 words)

	Economic Order Quantity
		Holding cost include the cost of financing the inventory along with the cost of physically maintaining the inventory.
		The cost of capital is 15% and the physical cost of maintaining this inventory is currently running at 7%.
		The cost of capital is 18% and the physical cost of maintaining his pizza inventory is currently running at 2% of cost.
	fozzy.wvstateu.edu /~lewis/handouts/eoq.html (1200 words)

	Module 5 Notes: Inventory Management (Site not responding. Last check: 2007-10-14)
		To derive the EOQ Model, set order cost equal to holding cost and solve for the decision variable Q. Holding cost is average inventory times the holding cost per dollar investment in inventory per year.
		For example, what is the impact on Q and total costs of changing the holding cost percent to 28%, what is the impact on Q and total cost of a 25% decrease in demand, and so forth.
		Cost (C) Recall that we computed the EOQ as 348 for the unit cost of $18.
	ruby.fgcu.edu /courses/tharring/10183/m5_notes.htm (6587 words)

	Supply Chain Management Review - The Real Cost of Holding Inventory (Site not responding. Last check: 2007-10-14)
		For decision-making purposes, it is unreasonable to apply 100 percent of the cost of equity to these assets.
		Using the yield on a money-market instrument as a proxy for the inventory cost of capital, significantly understates the inventory carrying charge.
		Although using faster modes increases transportation costs, it lowers the total cost of holding inventory.
	www.manufacturing.net /scm/article/CA318372.html?nid=2184&rid=1782958173 (5074 words)

	Greenhouse Effect and Sea Level Rise
		Where development is unprotected, the estimates of lost land and structures would probably account for the costs of increased flooding; although flood plains would move inland, the value of structures standing in the new flood plain would be approximately balanced by the inundated structures that are lost.
		The low estimates were based on the assumption that unit sand costs remain constant, while the high estimates assume that unit costs increase as the least expensive nearshore deposits are exhausted and it becomes necessary to go farther out to sea or mine lower-quality deposits.
		Estimating the cost of elevating roads and structures required us to obtain estimates of (1) the area of developed land that would be elevated, (2) the density of structures, and (3) unit cost factors.
	users.erols.com /jtitus/Holding/NRJ.html (10131 words)

	Holding Company Cost Economies in the Global Advertising and Marketing Services Business
		A translog cost function is employed wherein a firm’s costs vary according to its scale and two dimensions of the scope of its operations.
		A firm’s total variable costs are affected by its scale, scope (mix of services and markets served), and by the interaction of the two dimensions of scope.
		Scope economies arise when cost savings can be realized by a single firm jointly producing several services or jointly serving multiple markets as compared to splitting up the firm into smaller, stand-alone entities, each one producing just one service or serving a single market.
	www.bepress.com /romsjournal/vol2/iss1/art5 (392 words)

	KoreaTimes : Cost of Holding FX Reserves Estimated at 1.5 Pct of GDP (Site not responding. Last check: 2007-10-14)
		Cost of Holding FX Reserves Estimated at 1.5 Pct of GDP
		The cost of holding current foreign exchange reserves worth $141.5 billion is estimated at 1.5 percent of the nation’s gross domestic product (GDP), according to Citigroup.
		The group pointed out that even allowing for an added inducement to hold reserves in the hope of lowering foreign borrowing costs for the nation, the current hoard looks excessive relative to both short-term foreign debt and how much the country may be paying to avoid another financial crisis.
	times.hankooki.com /lpage/biz/200310/kt2003100816510011910.htm (291 words)

	[No title]
		This is the cost of holding or carrying one unit of inventory for one time period.
		This cost is either given as a particular dollar amount or is given as a percentage of the price of the item.
		If the holding cost is a percentage of the unit cost then you must enter the unit cost.
	www.prenhall.com /weiss_dswin/html/inventry.htm (867 words)

	Free Space Holding Cost
		is not reflected in the measured cost, and specifically, the refaulting cost component of the measured cost.
		The total holding cost is defined in equation 5.6 to be the time spent transferring (faulting) refaulted objects back into the cache i.e.
		Then, the opportunity cost is equal to the holding cost divided by the demand.
	www.dcs.gla.ac.uk /~lennons/steve_thesis/node67.html (666 words)

	Inventory Control Module : Reorder Cost vs. Holding Cost (Site not responding. Last check: 2007-10-14)
		ACTIVITY FOCUS : Determining the relationship between reorder and holding costs and their joint affect on system cost and losses.
		Reorder (or setup) cost is the dollar value associated with producing or ordering inventory stock, which can include administrative costs, record keeping, and machine preparation.
		Holding cost is the dollar value associated with keeping inventory available, such as insurance premiums, storage space, and capital investment.
	links.math.rpi.edu:16080 /oldmodules/inventorycontrol/reordercost (173 words)

	[No title]
		Holding or carrying cost is the cost of maintaining inventory, including the cost of space, heat and electricity, insurance and loss of interest if the money were in the bank instead of tied up in inventory.
		The cost of holding one unit for one year is denoted by H. The constant H is often expressed as a proportion I of the unit price P: H = IP.
		The quantity ordered is denoted by Q. The larger Q is, the smaller the annual ordering cost, but the larger the annual holding cost, so there is a trade-off.
	www.uic.edu /classes/idsc/ids355a/973/ntsch09.htm (1076 words)

	Inventory Control
		The cost of holding the stock (e.g., based on the interest rate).
		The cost of shortage, i.e., what is lost if the stock is insufficient to meet all demand.
		The third element is the most difficult to measure and is often handled by establishing a "service level" policy, e.
	home.ubalt.edu /ntsbarsh/Business-stat/otherapplets/Inventory.htm (482 words)

	An Economic Order Quantity Model For Time Varying Demand (Site not responding. Last check: 2007-10-14)
		In this paper, a generalized relationship between the demand and the ratio of the ordering cost and the inventory holding cost is derived when the total of the ordering and holding costs is minimized.
		The result is that the total cost will be the sum of two functions: one function (holding cost) that is directly proportional to the order quantity and another function (ordering cost) that is inversely proportional to the order quantity.
		Since the cost of ordering and cost of holding inventory for these companies are not known, for this example, we assume that the cost of holding inventory will be about $1.00 per unit per year and the cost of ordering the inventory will be about $25.
	www.ijme.us /issues/spring2001/articles/EconomicOrder.htm (2635 words)

	BOLA : The Management of Inventory: Stock Control Mathematics (Site not responding. Last check: 2007-10-14)
		The holding cost/unit (Ch) is derived from the average inventory value) multiplied by the cost of carrying the item over the period (one year) expressed as a % of the item cost/value.
		The order/acquisition cost (or set-up cost for a make-to-stock situation).
		This mediates the estimated costs of stock-outs with the cost of carrying a safety reserve.
	www.brunel.ac.uk /~bustcfj/bola/operations/stock/maths.html (653 words)

	Lecture 1 Notes
		In Figure 12 we set the cost of arc (i, j) equal to the setup cost in period i plus the production and holding costs required to satisfy all demand in periods i through j – 1 using only the setup in period i.
		Recall that in the EOQ model the average annual setup cost equals the average annual holding cost.
		Shortage cost: The expected shortage cost equals the penalty p multiplied by the expected number of shortages per cycle, n(R), multiplied by the expected number of cycles per year.
	www.ise.ufl.edu /koustuv/ein4333/LectureNotes.html (4555 words)

	Greenhouse Effect and Sea Level Rise
		Levees were assumed to cost $1.6 million per kilometer ($500 per linear foot) (Sorensen et al., 1984).
		In many areas, sand costs are currently higher because they already have to go farther out to sea, suggesting a greater scarcity, which might result in the escalation being greater; in other areas, there may be ample sand close to the shore.
		The fact that it may be cost effective to protect property does not necessarily imply that it would be in the interest of society to do so.
	www.erols.com /jtitus/Holding/NRJ.html (10131 words)

	TheManageMentor - Finance - Corporate Finance and Accounting - Baumol’s Model
		The opportunity cost of holding cash is known and does not change over time.
		The firm incurs a cost known as holding cost for maintaining the cash balance.
		As the demand for cash, ‘C’ increases, the holding cost will also increase and the transaction cost will reduce because of a decline in the number of transactions.
	210.210.18.114 /EnlightenmentorAreas/finance/CFA/baumols_model.htm (477 words)

	Appraising Synchronization ON Holding Cost (Site not responding. Last check: 2007-10-14)
		Well constructed knowledge bases that are used in a tested selection methodology reduce the RFI process from months to weeks, eliminate data quality issues and allow an apples to apples comparison of vendor offerings.
		Abstract : Evaluating the cost of outsourcing can be challenging because most organizations cannot fully estimate the financial impact of such a decision.
		To meet the objectives of lean, we need to evaluate the cost of failure in terms of both not meeting business objectives and any extra cost due to the need for unplanned or even emergency repairs.
	technology-evaluation.com /researchit/appraising_synchronization_on_holding_cost_home.html (500 words)

	[No title] (Site not responding. Last check: 2007-10-14)
		The cost of each coffee maker is $78.00.
		Holding costs are 40% of the cost of the coffee maker.
		Tradeoff is between lower unit cost and increased (higher) holding cost!
	www.uapb.edu /busmg/classes/purchim.htm (965 words)

	Hold the Holding Costs
		carrying cost) and turn are elements that apply to all inventories, not just used vehicles, although used will be our focus here.
		One key part of this formula is the average aging of the vehicles being sold.
		If you take the time to educate your personnel on items such as inventory turn and inventory holding cost, you will see their performance improve.
	wdb.wardsauto.com /ar/auto_hold_holding_costs (627 words)

	KGSM Paper-Quantifying the impact of inventory holding cost and reactive capacity on an apparel manufacturer's ... (Site not responding. Last check: 2007-10-14)
		This paper models the impact of inventory holding cost and reactive capacity on Northco's targeted understocking and overstocking cost and offers a solution methodology for such problems.
		It quantifies the impact of varying inventory carrying costs (and hence, high working capital costs) on stockout costs and the value of additional capacity.
		Results illustrate that apparel manufacturers with high working capital costs, and hence high inventory carrying costs, should target higher stockout costs and achieve lower capacity utilization.
	www.kaistgsm.ac.kr /re_center/paper/2002/PP-2002-069.htm (160 words)

	Inventory Management
		Holding or carrying costs: storage, insurance, investment, pilferage, etc.
		Holding cost = $3 per item per year
		Holding cost is a % of the purchasing cost
	www.uky.edu /~dsianita/300/inventory.html (316 words)

	[No title]
		Although the cost of computing has decreased considerably, the cost of data acquisition has not decreased in a similar fashion.
		Business organizations still have many items for which the cost of data acquisition for a “perpetual” inventory system is still considerably higher than the cost of the item.
		Important Note: Calculations of total cost under (a) and (b) are actually inappropriate because the original assumptions as to lot size would not be satisfied by the calculated EOQs.
	www.umsl.edu /~campbell/252/solutions/chapter12solutions.doc (2042 words)

	BoaterEd Forums - Cost/Value Holding Tank
		One of the issues that has come up via the survey as the boat does not have a holding tank - it does hava a pump out station but only a portable head.
		("pumpable portapotty") is fine for a boat the size of the Vista...but not having a "proper" head and holding tank could impact the value of a boat the size of the 290 SR.
		The self-contained unit holds as many flushes as a 15-18 gal tank connected to a manual marine toilet, requires no maintenance, and eliminates odors from sea
	www.boatered.com /forum/topic.asp?TOPIC_ID=65406 (434 words)

	[No title]
		Cost (TAC) 2 x¤=B14+B15 2 x'=C14+C15 - 2 17-"2 % Over Minimum TAC 2 '=(C16/B16-1)*100 - 2 18 2 «19-%2 «Max.
		Cost (TAC) 2 xô$894.432 xi$908.33- 2 17-"2 % Over Minimum TAC 2 ~1.55- 2 18 2 «19-%2 «Max.
		Holding cost: $Ch per item in inventory per year.
	engr.smu.edu /~jlk/1360.FA.2003/Lecture11.ppt (410 words)

	chapter 12 notes (Site not responding. Last check: 2007-10-14)
		Setup costs - costs result when changing over from one fixture type to another, involved with product changes, cost of labor and fixturing.
		Example: Given the annual demand for widgets is 10,000 units, the inventory holding cost per unit per year is $15, the cost to place an order is $100, and the price of each widget is $10.
		Example: The annual demand for Product X is 60,000 units and the setup cost per unit is $ 50.
	www2.canisius.edu /~fishl/inventorymgt-eoq.html (732 words)

	[No title]
		Backorder costs: expediting, special orders, rush shipments, etc. Lost current sale cost.
		Frequent orders means cost of ordering is large.
		Total cost = order cost + holding cost Find order quantity that gives minimum total cost (use calculus).
	www.umsl.edu /~rbanis/in483f00/ovrheads/pptshows/inva.ppt (763 words)

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