Storage cost rate

Storage cost rate: How much does storage cost?

A company’s capacities for the distribution and storage of goods and merchandise are limited, and they are associated with considerable costs. As a result, it is essential to plan in advance which goods are to be stored in what quantity and type – and kept in stock for fast picking. The so-called storage cost rate is used to determine the extent to which storage costs are related to the yield values of a product.

As part of internal cost allocation, the storage cost rate means that a specific price is allocated to each warehouse transaction. Calculated on the basis of storage costs, the costs for pallet spaces or storage capacities in general, for example, can be determined. A high inventory cost rate combined with a high inventory of goods that are rarely or only rarely sold would demonstrate the inefficiency of such stockpiling.

The other way round: by determining the storage cost rate, a fixed value can be assigned to the respective originator within the company and plans can be made as to how inventory levels should be sensibly organized.