Calculate the total annual holding costs

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The annual demand of a manufacturing component used in company Day Detection Ltd is 15,000 units. The cost of the component is $75 and holding costs (which includes storage, insurance, and cost of capital) are 34% of the unit cost. Each time an order is placed the company expects to incur costs, such as administrative and receiving, of $170. The supplier lead time is 7 days and the company operates with even production 365 days a year. Calculate the total annual holding costs. Choose the closest answer from the list below.

Reference no: EM131663142

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