Which factor is considered a carrying cost?

Carrying costs represent the total cost of holding inventory and are crucial for effective inventory management. Among the choices provided, storage expenses are a primary component of carrying costs. These costs include expenses for warehousing space, utilities, taxes, and maintenance associated with storing inventory.

When businesses maintain inventory, they incur various expenses directly tied to the physical space used to store their goods. Such costs can accumulate significantly over time and affect overall profitability. Consequently, understanding and managing storage expenses is vital for businesses to optimize their inventory management processes and reduce carrying costs.

While delivery fees from suppliers, sales commissions, and marketing expenses are all important business costs, they do not reflect the ongoing expenses associated with holding inventory, which is why they are not classified as carrying costs. Focusing on elements like storage expenses helps businesses maintain a balanced approach to inventory while minimizing the financial burden associated with excess inventory.