What is the incremental holding cost


Discuss the below problem:

Your mid-sized wholesale company deals mostly in low cost commodity items. One particular product, dehydrated water, has a holding cost of only $1.36 per case.

You have been purchasing this amazing product for more than a year paying only $4.30 per case for standard shipping terms of 6 day delivery.

This vendor is now offering 2 day delivery for only $3.35 shipping costs per case.

What is the incremental holding cost when changing from 6 day service to 2 day service?

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Finance Basics: What is the incremental holding cost
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