Suppose a grocery store uses a P system for its inventory of apples, ordering once per week. Demand for apples averages 40 cases per week, with a standard deviation of 5 cases per week. Holding costs for the apples are $10 per case per year. The costs of each order are $150. The company carries 3 cases in safety stock to absorb uncertainty in demand. The company operates 52 weeks per year.

1. What are the expected annual holding costs?

2. What are the expected annual ordering costs?