Storage cost rate: How much does storage cost?
The capacities of a company for distribution and storage of goods and commodities are limited, in particular, they are accompanied by not inconsiderable costs. This means that it is essential to plan which goods are stored in which quantity and type - and thus kept in stock for fast picking. To determine the extent to which the costs of storage are related to the yield values of a product, the so-called storage cost rate is used.
As part of internal activity allocation, the inventory cost rate results in a specific price being assigned to each inventory operation. Calculated on the basis of the storage costs, the costs for pallet spaces or storage capacities in general can be determined. A high inventory cost rate with at the same time a high inventory of goods that are hardly or only rarely sold would show the inefficiency of such stockpiling.
The other way around: By determining the inventory cost rate, a fixed value can be assigned to the respective originator within the company and planning can be made as to how inventories should be sensibly arranged.
