Question: Amazon uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. Demand (D) = 20,600 units/year

Amazon uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics.

Demand (D) = 20,600 units/year

Ordering cost (S) = $55.00/order

Holding cost (H) = $ 4/unit/year

Lead time (L) = 3 week(s)

Cycle-service level = 90%, z = 1.28

Demand is normally distributed, with a standard deviation of weekly demand of 103 units.

The current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders.

What is the annual cost of holding the cycle inventory? (Enter your response rounded to the nearest dollar.)

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