Problem: Select any slow moving costly spare part of your plant and find out usage on an average per years. Find out the cost each item. The stockholding cost is 20%. The cost of lost production after a failure while a repair is made (i.e. cost of stock-out) is estimated as 15 times the cost of the item. The lead time to obtain a spare part is 6 months. How many parts, if any, should be held in store?