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Inventory holding costs
The total cost associated with holding stock. These costs consist of the cost of the purchase unit, the reordering cost, management costs and stock-out costs.
Inventory Turnover Index
This expresses the degree and time of immobilization of warehouse stocks. It is a tool for solving the problem of sizing the inventory (optimal stock). The “value” inventory turnover index comes from the following ratio: cost of goods sold / stock. Meanwhile the “quantity” inventory turnover index comes from the following ratio: Sold quantity / average level of stock.
