Custom Computers, Inc. assembles custom home computer systems. The heat sinks needed are bought for $12 each and are ordered in quantities of 1,600 units. Annual demand is 5,600 heat sinks, the annual inventory holding cost rate is $2 per unit, and the cost to place an order is estimated to be $59.
Calculate average inventory level.
Calculate number of orders placed per year.
Calculate total annual inventory holding cost.
Calculate total annual ordering cost.
Calculate total annual cost.