The opportunity cost of holding stock is the money that could be used for other purposes.
Some Proprietors and Business Managers sometimes take pride in the astronomical value of their holding stock, believing that the higher their stock value,the greater the chances of their continuous existence, but this is nothing more than a fallacy! In some businesses or organisations, their holding cost is estimated at one-third of the value of the stored goods per year and this consequently affect the profitability of such entities negatively!
