How we got the 7?

Example 4: Speaker Kits, Inc., wants to compute its ordering and carrying cost of inventory on lot-for-lot criteria. Speaker Kits has determined that, for component B, setup cost is $100 and holding cost is $1 per period. The production schedule, as reflected in net requirements for assemblies, is as follows: 1 2 3 4 5 6 8 9 10 35 30 40 0 10 40 30 0 30 55 WEEK Gross requirements Scheduled receipts Projected on hand Net requirements Planned order receipts Planned order releases 35 35 0 0 0 0 0 0 0 o 0 0 30 40 0 10 40 30 0 30 55 30 40 10 40 30 30 55 30 40 10 40 30 30 55 Holding cost = zero (no end-of-period inventory) Setups cost = 7 x 100 = $700