carry-costs

Vocabulary Word

Definition

Even if you've heard the term 'carry costs' before, it can be a bit tricky to fully understand. Basically, it's the cost of holding onto an investment, like stocks or property, over a period of time. This might include expenses like maintenance costs, interest charges, or taxes.

Examples in Different Contexts

In inventory management, 'carry costs' are the costs associated with storing unsold goods. A supply chain manager might say, 'Reducing our inventory's carry costs will improve our overall financial health.'

Practice Scenarios

Business

Scenario:

It seems like our warehouse expenses are skyrocketing. We need a better inventory management system.

Response:

Let's focus on reducing our carry costs by improving inventory turnover.

Real Estate

Scenario:

Owning real estate isn't just about the buying price. We must account for regular maintenance costs and potential vacancies.

Response:

Agreed. Lowering the carry costs should be our priority. Finding reliable tenants can help.