CLTD Exam - Question 125

Inventory carrying costs typically include expenses related to storing and maintaining inventory. These costs can be broken down into several categories such as financing costs (interest on capital tied up in inventory), space costs (storage-related costs like warehousing), and service costs (insurance, and taxes). Material handling equipment, maintenance of the plant where inventory is stored, and insurance are all directly related to the storage and risk management of inventory. Hence, they are part of inventory carrying costs. Production costs do not typically fall under inventory carrying costs as they are more associated with manufacturing processes rather than storage.