ABC is a retailer who sells packages of blank DVDs to its customers. It purchases packages of DVDs from XYZ at $$14$ a package. XYZ pays all incoming freight. No incoming inspection is necessary, as XYZ has a superb reputation for delivering quality merchandise. Annual demand is $13,000$ packages, at a rate of $250$ packages per week. ABC requires a $15\%$ annual return on investment. The purchase order lead time is $2$ weeks. The following cost data are available:

Relevant ordering costs per purchase order $$200$

Relevant carrying costs per package per year:

Required annual return on investment, $15\%*$ $$14=$ $$2\mathrm{.}10$

Relevant insurance, materials handling, breakage, etc., per year $$3\mathrm{.}10$ $$5\mathrm{.}20$

If EOQ is equal to $1,000$ calculate de total relevant costs for EOQ: