Depreciation and obsolescence are inventory carrying costs.

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Depreciation and obsolescence are both examples of inventory carrying costs, which are the expenses incurred by a business to store and maintain its inventory stock. Depreciation refers to the decrease in value of an asset over time, while obsolescence refers to the loss of value resulting from an item becoming outdated or no longer in demand. Both costs can affect a business's bottom line and should be taken into account when calculating the total cost of inventory.

Depreciation and Obsolescence Are Inventory Carrying Costs