What is the total holding cost per year


Problem: You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 252 days a year and has the following characteristics for its primary item: Demand = 25,000 units/year Ordering cost = $31/order Holding cost = $1/unit/year Lead time = 4 days Standard deviation in daily demand = 3 units What is the total holding cost per year, including annual holding cost for safety stock (to the nearest whole number)? (Service level=95%)

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