Inventory carrying cost interest rate
The standard rule of thumb puts the carrying costs at 25% of inventory value on hand (cf. James R. Stock and Douglas M. Lambert, Strategic Logistics Management, 2nd Edition, Irwin Professional Publishing, 1987). Another quick method of calculating the cost of carrying inventory consists in adding 20% to the current prime rate for borrowing money. For instance, if the prime rate is 10%, the carrying costs would be 10+20=30%.