Best Pallets Ltd$.$ is looking at ways to reduce its inventory costs. Last year with sales of $$104,000,$ total inventory costs amounted to $$1,800.$ The company sells their pallets for $$130$ each. The manager has come to you for advice as he has heard that the company$$s total inventory costs could be reduced with the implementation of the economic ordering quantity model. The company$$s inventory cost are as follows:

Total ordering cost $$125$ per order

Material handling cost $$1\mathrm{.}50$ per unit

Warehouse space $$1\mathrm{.}00$ per unit

Insurance $$2\mathrm{.}50$ per unit

Required: Calculate the total inventory cost using the EOQ model and advise the manager whether or not it would be beneficial to change to this method of inventory management.