Maintenance & Reliability worked example

Spare Parts Carrying Cost at 21% annual carrying rate: a worked example in maintenance & reliability

Push annual carrying rate up to 21% and the picture changes. This example computes every intermediate figure at that operating point. Use it when reviewing spare holdings, justifying stock reductions, or explaining the cash cost of overstocked storerooms.

The inputs for this scenario

  • Average spare inventory value: 450,000 $ (unchanged)
  • Annual carrying rate: 21 % (raised for this scenario; the documented default is 18)
  • Carrying capture factor: 100 % (unchanged)
  • Fixed storage and administration cost: 12,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable carrying cost = average spare inventory value × annual carrying rate × carrying capture factor) to the inputs above produces each figure below.
  • At this operating point the engine returns 9,462,000 $ / yr for annual spare carrying cost, the number this scenario is built around.
  • At this operating point the engine returns 21.03 $ / $ for carrying cost per inventory dollar.
  • At this operating point the engine returns 9,450,000 $ for variable carrying cost.
  • At this operating point the engine returns 12,000 $ for fixed storage burden.

How this compares with the baseline

  • Against the tool's baseline example, where annual carrying rate sits at 18% and the headline result is 8,112,000 $ / yr, this scenario comes in 16.64% above the baseline at 9,462,000 $ / yr.
  • It multiplies average spare inventory value by the annual carrying rate and a capture factor to get variable carrying cost, then adds fixed storage and administration to give total annual carrying cost. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Annual Spare Carrying Cost: 9,462,000 $ / yr (headline result)
  • Carrying Cost per Inventory Dollar: 21.03 $ / $
  • Variable Carrying Cost: 9,450,000 $
  • Fixed Storage Burden: 12,000 $

Run it with your numbers

  • Every input above is editable in the live Spare Parts Carrying Cost calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.