Empty packaging uses more than warehouse space: it also ties up capital until it is needed. Show space, financing and damage on separate lines so the same expense is not counted twice.
Cost the stock over a period
First record average stock units and the net shelf or floor area they occupy over a week or month. Space cost = area used x warehouse-area cost for the same period. If space is shared, apply your organisation’s cost-allocation method.
Tied-up capital cost = average stock value x the business’s annual financing rate x days held / 365. Show damaged or unusable packaging and extra handling separately; do not blend them into space cost.
Compare purchase choices in the same unit
Divide the total by usable packaging units or units shipped to get a unit cost. Compare the bulk-order unit price with smaller, more frequent orders using this period total. Record the source of the area, days, unit count and warehouse cost.
